EBA: Investors should avoid Bitcoin, identifies 70 risks

[Erdogan]

if they regulate bitcoin, it will become the opposite of what Satoshi envisioned
if they don't, it will always be seen as some crazy investment and not taken serious enough by most people

When it's cheap, or even profitable for you, it is easy to hail the government. When your fortune is at stake, you find your ways.

[herzmeister]

It seems that the EBA is aiming at something that is like Bitcoin for transactions between personal wallets:

"With transfers and exchanges of VC units (other than person-to-person transactions between wallets), information on the payer and the payee has to be exchanged with the relevant scheme governance authority." -- pp. 40: http://www.eba.europa.eu/documents/10180/657547/EBA-Op-2014-08+Opinion+on+Virtual+Currencies.pdf

So surprisingly consumer-to-consumer transactions will go peer-to-peer without any authority or middleman interfering.

I'm almost certain there will be central authorities where you will have to register your full identity (AML/KYC and all).

So it will be more bureaucratic and cumbersome to use, and thus also more expensive (albeit that part will be probably subsidized).

Still, as said, who uses any of those gov-mail things over email?

[Anders]

I'm almost certain there will be central authorities where you will have to register your full identity (AML/KYC and all).

So it will be more bureaucratic and cumbersome to use, and thus also more expensive (albeit that part will be probably subsidized).

Hmm... I guess you are correct about that they will require registering personal information:

"The risk driver b), which concerns the anonymity of payers and payees could be addressed, at least within the EU, by requiring exchanges, and any other non-user market participants that interact with FC, to comply with CDD requirements. CDD requirements include the collection and verification of basic identity information; matching names against lists of known parties (such as ‘politically exposed persons’); determining the customer's risk in terms of likeliness to commit money laundering, terrorist finance or identity theft; and monitoring a customer's transactions against their expected behaviour and recorded profile, as well as that of the customer's peers."

What the heck is 'politically exposed persons'? Sounds Orwellian.

Still, as said, who uses any of those gov-mail things over email?

The (unfair) advantage they will have is that mainstream financial services in the EU will use their virtual currency and perhaps refuse to accept Bitcoin.

[herzmeister]

What the heck is 'politically exposed persons'? Sounds Orwellian.

exactly. and "politically exposed persons" would be snowden or wikileaks of course.

[Anders]

One stunt the EU could do is to have eurocoins created by exchanging them with euros. Say for example 1 eurocoin = 1 EUR. And when new eurocoins are created the euros are destroyed. This means that the money supply in the EU will remain the same and that the euro is gradually replaced by the new cryptocurrency Eurocoin (or whatever name will be used).

And miners would not earn any eurocoins. Instead it will be up to the governments in the EU member states to set up Eurocoin miners as a public service.

[Erdogan]

One stunt the EU could do is to have eurocoins created by exchanging them with euros. Say for example 1 eurocoin = 1 EUR. And when new eurocoins are created the euros are destroyed. This means that the money supply in the EU will remain the same and that the euro is gradually replaced by the new cryptocurrency Eurocoin (or whatever name will be used).

And miners would not earn any eurocoins. Instead it will be up to the governments in the EU member states to set up Eurocoin miners as a public service.

They could, and it would be a continous change (much like moving from paper euros to plastic euros).
You would get anonymity and direct remote transactions. But I have not much hope, because they would probably take out the anonymity aspect.

[Anders]

One stunt the EU could do is to have eurocoins created by exchanging them with euros. Say for example 1 eurocoin = 1 EUR. And when new eurocoins are created the euros are destroyed. This means that the money supply in the EU will remain the same and that the euro is gradually replaced by the new cryptocurrency Eurocoin (or whatever name will be used).

And miners would not earn any eurocoins. Instead it will be up to the governments in the EU member states to set up Eurocoin miners as a public service.

They could, and it would be a continous change (much like moving from paper euros to plastic euros).
You would get anonymity and direct remote transactions. But I have not much hope, because they would probably take out the anonymity aspect.

Yes, the EBA report mentions CDD requirements.

"The concept of CDD begins with verifying the customer’s identity and assessing the risks associated with that customer." -- https://www.ffiec.gov/bsa_aml_infobase/pages_manual/OLM_013.htm

I think that could be good. And Bitcoin, Anoncoin etc will become stronger, since they have anonymity.

In another thread I wondered if the use of unique user IDs would allow the coins to be stored only on the block chain. Then that would remove need for the cumbersome protection and storage of coins in private wallets etc.

[wachtwoord]

This is like Walmart, blockbuster, Best Buy and Barnes and Noble announcing buying online is very very dangerous and not recommended 10 years ago. Sure, I'll believe you, now go read the rest of your fairy tale

[Anders]

The Eurocoin could become interesting, IF they can keep it free enough from Orwellian control.  And Bitcoin and other cryptocurrencies will be useful as an alternative and to ensure that the bureaucrats are kept in line.

Even more interesting to me is the possibility of a FREE cryptocurrency. Plug for my thread about that: https://bitcointalk.org/index.php?topic=683740.0

[iflash]

OF COURSE, they say BS like that. A currency beyond bank's control is their worst enemy. They will not succeed in "writing it down". To me, statements like this only show their fear of losing control over currencies.

[Anders]

OF COURSE, they say BS like that. A currency beyond bank's control is their worst enemy. They will not succeed in "writing it down". To me, statements like this only show their fear of losing control over currencies.

Bitcoin will force the banking cabal to respond. Indeed, the EBA report is a proof of that. Sure, the fiat currencies are still massively more important than cryptocurrencies, yet the fiat fractional reserve scam currencies are perhaps like dinosaurs. Ha ha.

[kuusj98]

70 risks my ass, they are investors, they know the risks they are taking and know damn well how to cope with them.

Anyway, EBA is BS and they spread such things for they're own wellbeing.

[Anders]

I learned that the bitcoins are actually stored on the block chain and are therefore secure. It's the private Bitcoin addresses that people need to store and protect locally and personally. With eurocoins there would be no need for that! If the eurocoins are stored together with real user IDs then the coins are safely stored on the block chain without the need for local storage of private addresses or anything like that.

Also, if the user ID sign-in is like banking style safe, then that's a huge advantage over the risky Bitcoin wallets.

EDIT: Correction: I read again: "With transfers and exchanges of VC units (other than person-to-person transactions between wallets), information on the payer and the payee has to be exchanged with the relevant scheme governance authority."

So it seems that the eurocoin block chain actually will be anonymous, since information about person-to-person transactions need not be exchanged with the governance authority.

But as already been pointed out, that remains to be seen if that actually will be the case.

[Catmoonglow]

Anyone with a marginal level of investment experience can spot a Ponzi scheme a mile away.

[Anders]

Anyone with a marginal level of investment experience can spot a Ponzi scheme a mile away.

You mean Eurocoin will be a Ponzi scheme? I wonder what the U.S., China and other countries will do if Eurocoin becomes real.

One plan may be that they will gradually convert euros into a eurocoin cryptocurrency. And then a globalcoin is launched and the whole world will convert their currencies into that.

Or the U.S. will in a response to Eurocoin adopt Bitcoin as an official currency. That could be an interesting fight.

[jubalix]

this is great, BTC does not care about any banks regulation because it operates without them and without large parts of state machinery.

how ever the obverse is not true, or increasingly less true. Banks will cease to exist for the most part without BTC/ BTC TECH.

[2good2betrue]

It's not true

"The EBA recommends European banks and financial institutions to have Bitcoin exchanges to follow financial requirements like KYC and AML to have Bitcoin innovation succeed outside of the current financial sector. This is perfect. Many exchanges already have sound information on their customers and are happy to inform regulators about big transactions or other suspicious actions of their customers (for example to prevent terrorism). This makes Bitcoin just a little more acceptable for mainstream businesses and people."
http://www.eba.europa.eu/documents/10180/657547/EBA-Op-2014-08+Opinion+on+Virtual+Currencies.pdf

[herzmeister]

Kind of looking forward to this, they can't really compete economically with Bitcoin due to the cost of implementing and maintaining a system and they seem unable to grasp the concept of openness so they'll likely end up destroying each other in attempting to monopolise digital money

yup, exactly, and hopefully;

it's like Murdoch looking at the internet and trying to come up with his own version of an "internet" under his control. (although the centralization of information in "our" internet with dominant players like google of facebook is concerning of course).