EU warned digital currencies such as Facebook’s Libra would be unable to operate in the area
EU finance ministers agreed that private cryptocurrencies such as Libra of Facebook in the European Union should not be allowed until the risks posed are clearly resolved, reported Reuters on Thursday.
The European Union’s finance ministers have agreed to a de facto ban on launching in the region of so-called global “stablecoins”, like Facebook, that is planning the Libra digital currency until the bloc has a general approach to regulation that can mitigate the risks posed by the technology.
The move proves a tough line on Libra, which has appealed criticism from global regulators since it was announced last June.
In a joint statement, the Council and the European Commission said that “no global stablecoin arrangement will begin operating in the European Union until the legal, regulatory and oversight challenges and risks have been satisfactorily identified and addressed”.
This statement includes recognition of the potential benefits of cryptocurrency technology, such as cheaper and faster payments across borders. However, they pose challenges and risks related in many ways, such as consumer protection, privacy, tax, cybersecurity and resilience, money laundering, terrorist financing, market integrity, governance, and legal certainty.
Stablecoins are digital currencies, like Libra, often backed by traditional currencies and other securities. While cryptocurrencies like bitcoin do not. Both are cryptocurrencies.
EU ministers said they could review EU rules for regulating cryptocurrency assets and stablecoins as part of a global plan.
According to the statement, all options are left open to ensure effective regulation. Ministers and members stated that this should include any measures to prevent the creation of risks that cannot be controlled by some global stablecoins.
In a document presented to finance ministers, the European Central Bank (ECB) said a public digital currency may be needed if payments in Europe are still too expensive, according to a report of AZ Coin News.
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