The country of Austria is a place located in the heart of Europe in every conceivable sense. From its geographical location to the history and culture of this nation, it has been an integral part of all the changes taking place in Europe in the last thousand years. Today, the country of over eight million people is a small market and a similarly modest economic power. Its industrial and service capacities have been put in place a decade ago and since the end of the second world war, Austria has not seen any major change in its financial outlook.
Yet, it is a full member of the EU and a part of the wider German-speaking market that encompasses almost 100 million people in Europe alone. This is why the news that its government is considering a regulation mechanism for cryptocurrency and their ICOs is so important not just for the country, but the whole European Union as well.
Regulating Crypto Assets
Recently, the government in Vienna decided to join other nations that are planning to regulate initial coin offerings as well as cryptocurrencies in general. At the present moment, the course that the government is planning to take would equate crypto assets to gold and derivatives.
In other words, the regulation mechanisms would be borrowed from these fields and place to the crypto market. The main reason for this undertaking is the government’s concern about the use of cryptocurrencies for illegal ventures like money launderings.
It has also argued that oversight of this trading domain is necessary as much as it is in the trading process of traditional financial products. According to the Austrian Finance Minister Hartwig Loeger, cryptocurrencies are gaining an evermore significant importance in the process of fighting money laundering and financing of terrorism.
He believes that is the reason why Austria needs more security and trust in the crypto market. The same market is used by millions to trade, invest, purchase and even bet online using BTC and other cryptocurrencies. Now, the move of the current government could be enough to change that inside of Austria.
The Proposed Measures
Loeger explained that the government plans to introduce several measures as a part of the same regulation drive. These include the requirement that the participants of the cryptocurrency market register their identity, but also that any trade over $12,000 has to be disclosed to the official financial intelligence unit.
The regulation would also cover ICOs and the government would apply current rules regulating market manipulation, front-running, and insider trading. The organizations of companies involved in trading of the digital assets would have to submit digital documents to the Austrian FMA, or the Financial Market Authority.
This means that the digital currencies would not have any different treatment in Austria than commodities. All of the proposed measures are already in place for a range of other markets and it appears that the government is planning to put cryptocurrency under the same regulatory umbrella.
The statement that the finance minister made are not without wider context. Recently, an alleged BTC scam hit the country in the form of the Optioment Company. Now, the government is seeking its members as suspects in an investigation of embezzlement.
The local media have found out that the investor losses add up to $115 million, making it a very serious charge. The investigation reaches beyond the borders of Austria, but it is clear that many of its citizens were affected. If the size of this sum of money ends up being true, it will be one of the biggest financial scandals in the recent history of Austria.
In this climate, the move by the government that aims to introduce regulation might be a preemptive strike at its upcoming critics. With the sum of over $100 million being potentially stolen through fraud in an EU member country, it is easy to see why politicians would want to appear tough on any future criminal ventures in this domain.
The EU Factor
It is certain that Optioment is a big factor in the recent incentive. Some might even claim that it is the only reason why the government is doing this in the first place. However, the impact of the successful regulation of the crypto market in Austria could end up being among the first such venture in the EU.
Here, the factor of the European Union is significant. At this point, Malta is the only EU country that is actively working on a range of issues related to digital currency. The same country has spearheaded all of the EU initiatives that aim to use this tech for the economic betterment of their citizens, not just to deal with a potential threat.
But, Malta is both geographically and politically, on the fringes of the EU project. Austria, on the other hand, has a range of benefits for becoming a hub of cryptocurrency use and development.
The Heart of Europe
In this context, the position of Austria would be a big benefit because it borders Switzerland, a country that is deeply involved in cryptocurrencies. By being next to it, the development of the local scene could go a lot faster and smoother.
It might seem that blockchain and cryptocurrency projects, like those in social media, eSports, and other digital ventures, require little physical presence. However, having a huge pool of experience and know how right next door is still a major advantage.
Because of this, the optimistic members of the digital currency community believe that the development of regulation in Austria will also open up new possibilities. Currently, both the EU and Austria could use the same business opportunities. At the same time, the regulation could allow them to take place in a secure environment.
Additionally, the position of Austria could provide other EU nations with a chance to simply copy its legislative systems and do the same in their nations. This way, the regulative framework could spread out like a wave across the block and provide anyone who is looking to either develop or investing into cryptocurrency a great legal environment.