BERLIN (Reuters) – Regulation of cryptocurrencies must be considered, Bundesbank vice president Claudia Buch told Reuters, even though she does not believe they pose a threat to financial stability.

The German central bank (Bundesbank) vice-president Claudia Buch speaks during a photocall at the Bundesbank headquarters in Frankfurt, May 20, 2014. REUTERS/Ralph Orlowski

Buch said that speculation on volatile virtual tokens does not pose a systemic threat because it is not financed through credit, but she said that regulators should look at introducing rules to protect consumers, given that such speculation could prove costly for investors.

    “The role of crypto tokens in money laundering and criminal activity must also be closely examined,” Buch said.

FILE PHOTO: Representations of the Ripple, Bitcoin, Etherum and Litecoin virtual currencies are seen on a PC motherboard in this illustration picture, February 13, 2018. REUTERS/Dado Ruvic/Illustration/File Photo

“I don’t see a threat for financial stability at the moment as the speculations are generally not financed with loans and the relevant markets are rather small.”

The issue of how to regulate cryptocurrencies is likely to be high on the agenda at a March 19-20 meeting of Group of 20 finance leaders in Argentina.

    International Monetary Fund Managing Director Christine Lagarde has urged governments and central banks to develop regulations for such assets to prevent them from becoming a new vehicle for money laundering and terrorist financing.

    Japan has also urged its G20 partners to act on preventing cryptocurrencies from becoming a vehicle to finance criminal activities.

Reporting by Gernot Heller; Writing by Joseph Nasr; Editing by Andrea Shalal and David Goodman



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