Bitcoin Price Drops Amid EU’s Plans to Support Stablecoin
Since their launch, cryptocurrencies are infamously recognized for their high volatile character that changes quickly as and when situations take turns in the market space. A similar development was witnessed recently when Bitcoin’s price plummeted below $30,000 amid speculations of stricter regulatory reforms. The US, European, and Asian authorities have given a joint call to impose stringent regulations over crypto trading while supporting stablecoins.
As we know, with an investment worth billions of dollars, the cryptocurrency domain is spread across the globe. Despite such a whopping investment scenario, the arena does not have a well-designed regulatory framework for its management and operations. These virtual currencies are ardent supporters of customer privacy as they allow them to trade while being anonymous on the portal. Such complications have been the top priority concerns for authorities who often blame crypto as a tool for terror financing and illicit activities.
However, things have changed, and regulatory watchdogs in the European Union states are looking to pull strings for the crypto industry. They are willing to work out stricter controls on trading and allow the stablecoin projects to evolve. Stablecoin is a virtual token pegged against a fiat currency and thus allows users to enjoy stability and security of value. In order to keep a check on the use of crypto for money laundering purposes, European authorities are trying to make such transactions more traceable.
Interestingly, the news has shaken the global crypto sphere, with coins like Bitcoin, Ether, and XRP losing nearly 5% of their value. Those who have invested in Bitcoin saw the token dropping down to $29,300, the lowest since June 22, raising concerns about future trends. The European Commission stated that the firms dealing in crypto should come under the purview of anti-money laundering rules and transparent trading mechanisms.
The wallets that keep customer data hidden should be banned, whereas banks should disclose necessary information about crypto traders like their name, account number, DOB, etc. The proposals made by the commission can take two years to become a statute.
The meeting of the world’s leading financial regulators discussed the potential of stablecoins. They agreed that such assets could be used as a payment settlement tool backed by a secured currency. The US Treasury Secretary, Janet Yellen, emphasized that the government should develop a dedicated framework for cryptocurrencies and stablecoins to ensure customer safety. Recently, China clamped down its crypto mining industry, citing environmental concerns. The crackdown affected the price of Bitcoin immensely. The recent decision by European Union is likely to hamper crypto trading making tokens trade in a tight range field.