Written answers
Tuesday, 16 January 2018
Department of Finance
Banking Sector Regulation
James Lawless (Kildare North, Fianna Fail)
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205. To ask the Minister for Finance the actions his Department is taking to monitor the use and investment of crypto currencies such as Bitcoin here; the way in which these currencies affect the financial industry; the studies his Department is conducting to analyse the potential problems and risks involved in using and investing in these currencies; the regulatory frameworks required in the near future or that are currently in place in relation to crypto currency; if he is liaising with the Central Bank on these matters; and if he will make a statement on the matter. [55025/17]
James Lawless (Kildare North, Fianna Fail)
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206. To ask the Minister for Finance the safeguards in place to protect Irish investors that invest in crypto currency; and if he will make a statement on the matter. [55026/17]
Paschal Donohoe (Dublin Central, Fine Gael)
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I propose to take Questions Nos. 205 and 206 together.
Cryptocurrencies and their exchanges or platforms are currently not regulated and do not currently require an authorisation or licence from the Central Bank of Ireland. On 12 December 2013 the EBA published a warning to consumers on virtual currencies, and on 4 July 2014 issued an opinion recommending that national supervisory authorities discourage credit institutions, payment institutions and e-money institutions from buying, holding or selling virtual currencies.
The Central Bank subsequently published a notice on its website, warning consumers that no regulatory protections exist for consumers when holding, buying or selling virtual currencies. In addition, the Central Bank last month published an information notice to alert consumers to the high risks associated with Initial Coin Offerings, which are frequently associated with virtual currencies.
The Fifth EU Anti-Money Laundering Directive (5AMLD) will introduce measures to mitigate some of the money laundering and terrorist financing risks presented by cryptocurrencies. Agreement has been reached at EU level on the 5AMLD proposals but the legal text has not yet been published in the Official Journal of the European Union.
As part of the measures proposed under 5AMLD, Virtual Currency Exchanges and Custodian Wallet Providers will be required to register with a competent authority and will be subject to regulatory supervision and oversight in respect of their anti-money laundering and counter-terrorist financing obligations.
The Central Bank contributes to the work of the European Supervisory Authorities on cryptocurrencies. It has also been liaising with my Department on cryptocurrencies in the context of the National Money Laundering and Terrorist Financing Risk Assessment.
The Anti-Money Laundering Committee, chaired by the Department of Finance, is undertaking a risk assessment of new technologies, to include e-money and virtual currencies, from the point of view of anti-money laundering and combating the financing of terrorism. This is expected to be concluded by Q3 2018.
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