In its assessment of the applicability and suitability of EU law to crypto-assets, the EBA notes that, typically, activities involving Bitcoin and its ilk fall outside the scope of EU banking, payments and electronic money regulation.

This means that risks exist for consumers that are not addressed at the EU level and therefore the organisation needs to carry out a comprehensive cost/benefit analysis, taking account of issues inside and outside the financial sector, to determine what, if any, action is required.

Says EBA executive director Adam Farkas: "The EBA's warnings to consumers and institutions on virtual currencies remain valid. The EBA calls on the European Commission to assess whether regulatory action is needed to achieve a common EU approach to crypto-assets."

The EBA's assessment comes on the same day that the European Securities and Markets Authority (Esma) makes its call for a common EU-wide approach to crypto-assets to ensure investor protection.

Esma has identified gaps financial regulatory framework regarding crypto-assets that fall into two categories:

· For crypto-assets that qualify as financial instruments under MiFID, there are areas that require potential interpretation or re-consideration of specific requirements to allow for an effective application of existing regulations

· Where these assets do not qualify as financial instruments, the absence of applicable financial rules leaves investors exposed to substantial risks. At a minimum, Esma believes that AML requirements should apply to all crypto-assets and activities involving crypto-assets.

"In order to have a level playing field and to ensure adequate investor protection across the EU, we consider that the gaps and issues identified would best be addressed at the European level," says Steven Maijoor, chair, Esma.