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6/12/15

European Banking Industry: European banks urged to shun virtual currencies until safeguards in place

Banks in the European Union should stop offering customer accounts in virtual currencies like bitcoins until regulatory safeguards are in place. That is the view of the European Banking Authority.

 The watchdog organisation is proposing a new framework of rules and has advised banks to steer clear of virtual currencies until those rules are in place.

“This immediate response will ‘shield’ regulated financial services from virtual currency schemes, and will mitigate those risks that arise from the interaction between virtual currency schemes and regulated financial services,” the EBA said.

The planned regulations include a requirement for currency exchanges to hold reserves of cash so that if they go bankrupt – as happened with Japanese based exchange Mt. Gox – customers can be compensated.

Read more: European banks urged to shun virtual currencies until safeguards in place | euronews, corporate

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