Romania Drafting Bill to Regulate Electronic Money
The Romanian Ministry of Finance has published a draft “Emergency Ordianance” regulating the issuing of electronic money, Business Review reports. The new bill requires issuers of over EUR 350,000 of social capital in the form of electronic money to be cleared by Romania’s central bank.
This is the most recent announcement of federal legislation aimed at electronic currencies, following a series of new policies that have been implemented around the globe by countries like South Korea, Thailand, and India.
The Romanian National Bank (NBR) will be responsible for verifying all applicants claiming to have acquired or created a share capital of EUR 350,000. The bill states:
“The issuance of electronic money may be carried out by the following categories of electronic money issuers: credit institutions, electronic money institutions – legal person authorized to issue electronic money and providers of postal services emitting electronic money under the applicable national legal framework, the European Central Bank and the national central banks, when they do not act as monetary authorities or in any other capacity involving the exercise of public authority, Member States and their regional or local authorities when acting in their capacity as public authorities. Supervision of electronic money issuing will be ensured by the National Bank of Romania, which will also issue the necessary authorizations for those who want to create a digital currency.”
Once an electronic money issuer has submitted their application, the NBR will take 3 months to compile a detailed analysis of the applicant. The NBR will be looking for electronic money providers who display a formal framework for a carefully designed electronic money issuance system. Applicants will also need to submit verification of tax and legal records in order to receive approval.
The NBR expects, “transparent and coherent responsibility lines, effective procedures for identifying, managing, monitoring and reporting the risks to which it is or might be exposed and adequate internal control mechanisms, including rigorous administrative and accounting procedures.”
Approved applicants will be given 12 month authorizations to issue electronic money in Romania. Electronic money issuers will be required to perform annual audits which will be submitted to the NBR.
Lastly, the bill outlines a number of situations in which the NBR will have the right to cancel the authorization of electronic money issuers. This includes instances where issuers of electronic money are found to not be conducting business within Romanian territory, evidence emerging that authorization was obtained through false information provided on the part of the electronic money issuer, the electronic money issuer fails to fulfill the conditions of the authorization bill, or if an electronic money issuer is conducting activity that endangers the stability of its payment system.
Following the implementation of the bill, electronic money issuers attempting to conduct business without authorization will face fines and imprisonment for up to 3 years.
Increased federal legislation has spurred great debate among members of the cryptocurrency community. On one hand, federal legislation technically allows for legal transactions protected from government infringement. On the other, there is tremendous concern that governments will not be able to help themselves in overextending their reach to totalitarian lengths. Cryptocurrency idealists, fear that government oversight will stifle crypto’s market development, making it impossible for cryptocurrency to ever replace government created fiat.
However, given the recent surge in crime surrounding cryptocurrency. Government protection from theft and fraud could go a long way in legitimizing and protecting electronic money investors and traders from the crime without consequence plaguing the market.
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