The European Union plans to regulate crypto-currencies if risks from the sector are not tackled at the global level, Vice-President Dombrovskis said on Monday.
Speaking at a roundtable discussion on cryptocurrencies, Dombrovskis
commented on the global investment craze over bitcoin and other virtual currencies and the phenomena of investors making fortunes or heavily loosing due to the high volatility of the the price of virtual currencies.
"It's important there is an international follow-up at the global level," Valdis Dombrovskis said.
"We do not exclude the possibility to move ahead (by regulating crypto-currencies) at the EU level if we see, for example, risks emerging but no clear international response emerging."
On its own, Europe represents only a small share of global cryptocurrency trading. However, Dombrovskis underlibed the strong promise that the blockchain technology holds for financial markets, and the need to embrace it in the E.U in order to remain competitive.
However, crypto-currencies, which are not currencies in the traditional sense, and whose value is not guaranteed, have become subject of considerable speculation.
This exposes consumers and investors to substantial risk including the risk to lose their investment, Dombrovskis added.
He called for clear and frequent warnings about these risks to consumers and investors.
Dombrovskis also talked about the lack of transparency regarding the identity of the issuers and underlying business plans.
Crypto-assets present risks relating to money laundering and the financing of illicit activities.
"Based on the assessment of risks and opportunities and the suitability of the existing regulatory framework for these instruments, the Commission will determine if regulatory action at EU level is required," he added.