July 8, 2019 | AtoZ Markets - Against the background of Facebook Libra coin launch, Benoit Coeure the Executive Board member of European Central Bank (ECB) is urging the financial regulators to create a viable regulatory framework for cryptocurrencies.
ECB does not ignore crypto
Benoit Coeure believes, that all cryptocurrency projects are a useful wake-up call for public authorities, which are exposing the flaws of the existing regulatory system as well as the “failure of the banking system to adopt new technology.”
Coeure assumed, that crypto industry growth is an encouragement to raise a number of questions and improve the current regulatory system. He also admitted that it is “too dangerous” to allow tech giants like Facebook to “develop in a regulatory void for their financial service activities.”
EU to become the more crypto friendly region
The crypto enthusiasts believe that ECB Executive Board member's positive stance could be the first step for the cryptocurrency adoption in the European Region.
Notable that another crypto proponent, Christine Lagarde, the current IMF Managing Director, was recently nominated to become the new head of the ECB.
Last year, in her blog post “Addressing the Dark Side of the Crypto World”, Lagarde stated, she believes that only with the help of regulations, the cryptocurrency market will be able to scale up and become more stable.
Moreover, in her blog post on the IMF official website, the chairwoman of the International Monetary Fund called the blockchain technology an “exciting advancement that could help revolutionize fields beyond finance.”
According to Lagarde, the cryptocurrencies will have a substantial impact on the financial system. She argued that regulations around the crypto industry are inevitable but, regulators have to keep an open-mind when building such frameworks.
Libra attracts the attention of the national regulators worldwide
An upcoming Facebook Libra coin remains under close observation of the global authorities, including the U.S. House of Representatives, which is very concerned about the stablecoin potential use in money laundering activities. The EU regulators, including Japan, are experiencing high pressure regulating cryptocurrencies and preparing to upcoming Facebook Libra coin launch.
According to the latest media reports, the Internal Revenue Service (IRS) - the revenue service of the United States federal government- is expected to update its 2014 guidance on digital currencies. A bipartisan group of 20 lawmakers is considering at least three bills to provide regulatory clarity for cryptocurrencies that would potentially result in the growth of the sector in the U.S.
Last week, following the request from 30 advocacy groups the US Congress decided to halt Facebook Libra project until the profound questions raised by the request signatures are addressed.
US Senate will hear the testimony on Facebook Libra coin, on July 16, 2019. David Marcus the current Vice President of the Facebook Messenger would be testifying before the Senate Banking Committee and the House Financial Services Committee on the project
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