EU plans to block Facebook Libra coins. EU is ready to prevent the development of risky digital currencies, including Libra. That is until all concerns have been addressed. The news is according to the latest proposal that will be considered by the finance ministers of the EU.
06 November 2019, AtoZMarkets – Facebook is planning to launch a digital currency that has provoked a global reaction since its announcement last summer. On Friday, 8 November, EU finance ministers will discuss how best to address the myriad of challenges posed by this stablecoin. It is a digital token backed by sovereign currencies. Also, EU is Planing to launch public cryptocurrency.
EU Will Block Facebook Libra
The last draft text recalls the possibility of banning global stablecoins that create excessive risks. Member States state that all options should be on the table. That is also including the possibility of taking measures to prevent the development of projects. Those would create uncontrollable or excessive risks.
The previous version was vaguer. National governments were ready to take action to prevent global stablecoins from creating undue risk. The most recent text is in line with the original draft document prepared by the Finnish rotating presidency of the EU, which is already considering the possibility of taking measures. That would hinder the development of projects with uncontrollable risks.
The latest draft included a new paragraph saying that Libra and similar projects should not start operating in the EU. At least until all the challenges and risks have been identified and addressed. Friday’s debate is seen as a stepping stone to conclusions in December. But the lack of clear information on the Libra project hampers European progress.
The Lack Of Clarity On The Facebook Stablecoin
The European Commission has already sent two questionnaires to Facebook. That is to understand better the nature of the digital good and its objectives. Still, the lack of clarity on the stablecoin does not allow to draw definitive conclusions. That is on the applicability of the regulatory framework current European Union and the way it applies, says the draft text. Earlier, US Lawmakers also concerns about Facebook Libra.
Given the nature of the challenges posed by Libra, EU policymakers and regulators now want to act quickly, says the draft text. But EU officials are also wary of the unintended consequences. A rushed regulation of Libra and other crypto-asset and Fintech initiatives could have on other crypto-asset projects.
That is why Member States have stated that the new rules should be based on substantial evidence and general principles applicable to all stablecoins. Given the global nature of the Facebook project, Europeans argue for a global response. Facebook said it would not launch Libra until all regulatory concerns are clear. So that will likely result in a postponement of the initial 2020 release.
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