EU interior and justice ministers have gathered in Brussels on Friday for discussions on solutions to help tackle the spread of terrorism across Europe.
Based on a draft document seen by Reuters, it's expected they will urge the European Commission, the EU executive arm, to propose measures to "strengthen controls of non-banking payment methods such as electronic/anonymous payments and virtual currencies and transfers of gold, precious metals, by pre-paid cards."
It's being seen as an effort to curb terrorism funding by anonymous payments.
Now the EU want to ban Bitcoin and Dogecoin. Is there ANYTHING they don't want banned?
— Michael Senior (@MichaelSenior22) November 20, 2015
Virtual currency is an electronic cryptocurrency that is used to purchase virtual and actual goods and services. It is not backed by assets or legal currency laws, and is also not controlled by a centralized authority. Bitcoins can be sent to anyone who has an internet connection.
Scary: islamic state fighters using #bitcoin to #fund terror #crypto #cryptocurrency https://t.co/uEm23YJ6f6 pic.twitter.com/ZMvYianr3u
— BitcoinzWoman (@BitcoinzWoman) November 20, 2015
This lack of traditional financial control appeals to many, including it is feared, criminal and terror organizations.
Patrick Young is an investor and expert in global financial markets.
He says that even though digital banking markets may not be conventional, there are already regulations in place.
"Clearly terrorism must be fought by every means and safe border controls will be welcome from the authorities in Europe. With regard to Bitcoin, wherever it touches the banking system, deals are pretty transparent as they have to be with existing, and rather stringent, Anti Money Laundering laws."
If you're going to blame a currency for terrorism blame the Euro, not #Bitcoin. pic.twitter.com/zJ4jOgtf3c
— Otto de Voogd (@ottodv) November 20, 2015
"Even with direct Bitcoin to Bitcoin processes, there are ways and means to better understand the protagonists in deals," says Young.
Indeed, although the ability of the Islamic State to attract and generate financing across the world is formidable, there is little evidence to prove that ISIL uses digital currencies.
Mr Young suggests that there are other avenues of financial investment that terror groups are looking to.
"Really, the major issue with DAESH (an acronym for the Arabic phrase al-Dawla al-Islamiya fi Iraq wa al-Sham, which is IS) and Islamic terrorism is the Hawala networks, a simple method to transfer money across borders, which are broadly unregulated and much more prone to terrorist abuse than Bitcoin."
Ghostsec claims ISIS terrorists linked to Paris attack has Bitcoin Wallet Worth $3 Million. https://t.co/57YzHUWFE1 pic.twitter.com/CnLMYs43RA
— Anonymous (@LatestAnonNews) November 18, 2015
Other sources of revenue for IS include Iraqi oil. The Iraq Energy Institute estimates that the terrorists produce 30,000 barrels of oil a day in Iraq and 50,000 barrels in Syria.
Presidents Obama and Putin agree on bombing Islamic State's oil pipeline https://t.co/fme9DB9IIn pic.twitter.com/r5xbHxrDD7
— Bloomberg Business (@business) November 20, 2015
They claim ISIL gains US$3.2m a day by selling the oil on the black market at less than 50% of its free market price.
