The Financial Services and Markets Authority (FSMA) is pushing the government to bring regulations for digital currencies.
In a Senate hearing, Jean-Paul Servais, the chairman of the FSMA, brought the proposal before lawmakers, urging them to establish a “legal framework for the sale, purchase, and use of virtual currencies and all related financial products.”
Citing countries like Thailand, Russia, China, Argentina, Ecuador, Bolivia, and Algeria, which neither regulated nor banned cryptocurrencies, he pointed out the inefficiency of the Belgian authorities to address the industry.
He also pointed out the conflicts on the warnings issued by the market watchdog and the National Bank of Belgium, responding to an event promoting a Bitcoin-backed business.
The sheer size of the market is enough to raise alarms
The chairman also pointed out the flooding of the market with over a thousand digital currencies which combinedly valued at more than $320 billion. If not regulated, fraudulent activities using these currencies can impact the investors.
“Due to their non-traceability, the bitcoins are and other virtual currencies very popular in the context of cyber crime: they are ubiquitous on darknet, since they can become cyber crime committed without leaving traces,” the official resolution of the agency stated.
He also mentioned the increasing number of Bitcoin vending machines and ATMs popping up around the world, a couple of which also places in Belgium.
The resolution also cited warnings of economists and Nobel laureates over the surge of the crypto economy.
It also mentioned a royal decree from 2014, which bars any professional products based on virtual currencies from offering to the retail investors.
“A legal framework should be established without delay this virtual money and related financial products, in particular, to protect consumers and the use of this virtual currency for criminal objectives,” the resolution added.