Belgian foreign minister urged for a total ban on cryptocurrency amid recent turmoil in banking sector

The recent turbulence in the banking industry prompted Johan Van Overtveldt, a former finance minister of Belgium and current member of the European Parliament, to call for a complete ban on cryptocurrencies in a tweet from March 17. He thinks cryptocurrency should be prohibited across the entire EU.

The remarks follow the recommendation made by a special Basel Committee on Banking that institutions create protocols for storing and managing both Bitcoin and stablecoins by 2025.

Overtveldt commented as the European Parliament prepared to vote on substantial crypto licensing requirements for the region. He is the economic spokesperson for a group of 64 EU legislators.

“Another lesson to be learned from the current banking commotion. Enforce a strict ban on cryptocurrencies,” Van Overtveldt tweeted, adding that crypto provides “no economic or social value.” “If a government bans drugs, it should also ban crypto,” he speculated, alluding to new fears stemming from the distress to Silvergate and Silicon Valley Bank, which has since spread to European markets, sending shares of banks like Credit Suisse plunging to record lows.

The EU parliament’s legislators will gather next month to examine cryptocurrency regulation. The rule is anticipated to give wallet providers and exchanges a framework for adhering to governance and consumer protection norms.

The technology has “enormous potential” to increase productivity. Still, Overtveldt cautions that many speculative projects that enter finance through cryptocurrencies tend to harm consumers. Several strict capital requirements are included in the future banking legislation in the European Union for banks that hold cryptocurrency.

According to a report by Reuters on February 20th, the Basel Committee, comprised of banking regulators from significant financial hubs globally, has set a deadline of January 2025 for implementing capital standards for banks that hold cryptocurrencies such as Bitcoin and stablecoins: “For the time being, banks have very low crypto-asset exposures and only a limited involvement in providing crypto-asset-related services. Banks have expressed interest in trading crypto-assets on behalf of their clients and to provide crypto-assets-related services. From an international perspective, it would also allow the EU to fully align itself with the implementation deadline agreed on at Basel level.”

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