The European Parliament has published a study identifying a number of legislative bullheaded spots pertaining to crypto nugget oversight in the Eu.

The study identifies stablecoins, token-based fundraising, and the threat of money laundering through crypto mining amidst contempo industry developments necessitating a regulatory response.

Crypto mining identified as coin laundering risk

The study asserts that cryptocurrency mining may be used every bit a vehicle by criminal organizations to "create clean cash":

"Newly mined coins are by definition 'clean', so if someone (eastward.g., a bank) is willing to convert them into fiat currency or other crypto-assets, the resulting funds are as well clean. A commencement regulatory step could be to endeavor to map the utilise of this technique and afterward, if it effectively proves an important blind spot, to consider appropriate countermeasures."

Several other blind spots are identified in current regulations, including guidelines for crypto-to-crypto exchanges and financial service providers dealing in token sales.

The parliament likewise recommends that the legal definition of cryptocurrencies be broadened to include tokens to crack down on illicit fundraising activities.

Parliament recommends European AML watchdog

To combat new money laundering risks posed by crypto assets, Eu lawmakers recommend the creation of a regional Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT) regulator.

The parliament emphasized that a European AML watchdog would only be effective if it is staffed with "highly trained IT personnel capable of analyzing the AML/CFT risks new technologies bring."

Global stablecoins pose new challenges for regulators

The report notes that many stablecoins are in apportionment, near of which are described equally having a "local footprint." However, the parliament notes that the emergence of global stablecoins like Facebook's Libra poses unique challenges to lawmakers.

The report describes global stablecoins every bit beingness "built on superlative of existing, large and/or cantankerous-border user bases," alarm that they "have the potential to scale very chop-chop to achieve a global or other substantial footprint."

The parliament'southward concerns echo the observations of economist John Vaz, who recently told Cointelegraph that "Libra starts with a very big 'domain possibility,' more any other cryptocurrency," adding:

"They are targeting a market that is ready-made for them — people are already doing transactions over Facebook, and Messenger, and WhatsApp, and Instagram. They've got the bulletin traffic, and those people are making economic transactions already using fiat."