A new European Union (EU) draft document says that the European Central Bank (ECB) should hasten progress towards issuing its own digital currency for use by the public ahead of Facebook’s Libra project.
The EU draft document was reported by Reuters earlier Tuesday. It states that members of the supranational organization should be united in their approach to cryptocurrencies. So far, the EU has not regulated the industry and only a few individual nations have any form of a framework in place for digital assets.
The draft, prepared by the Finnish EU presidency, reads:
“The ECB and other EU central banks could usefully explore the opportunities as well as challenges of issuing central bank digital currencies including by considering concrete steps to this effect.”
The document may be up for debate by European finance ministers this Friday. It could then be adopted as soon as December 5.
Regulators have largely ignored stablecoin projects up to now, particularly given their relative insignificance in terms of market size. However, with Facebook boasting over two billion active users, that could change very quickly if and when Libra actually launches.
Since the Libra project was detailed in June, as reported by BeInCrypto, regulators from the EU and beyond have expressed concerns about the social media company’s financial ambitions. Prompted by the Libra announcements, a G7 task force exploring the implications of stablecoins launched by private entities stated last month that such projects should not go ahead until all global concerns are addressed.
Regulators from France and Germany argued that Libra poses a potential risk to the financial existing financial sector. Both nations apparently back an alternative digital currency built by the ECB.
ECB board member Benoit Coeure said that the bank should hasten its progress towards creating its own stablecoin for public use in September. Meanwhile, Markus Ferber, a leading German politician on financial matters argued:
“At the very least, we need a robust regulatory framework to deal with virtual currencies… The [executive EU] Commission has been way too… complacent on the issue so far. With the threat of Libra on the horizon, it is time for action now.”
Libra’s Future Unsure
Libra has been met with several setbacks since Facebook first announced it in June. In addition to European regulatory concerns, both President Donald Trump and US Treasury Secretary Steven Mnuchin have expressed doubts about the plans. The latter even called it a “national security issue”.
More recently, several high profile companies have pulled out of the Libra Association. The likes of Mastercard and Visa, amongst others, announced that they would not be working on the project at this early stage of development. The decision appears to have been influenced by pressure from US senators. Coinbase CEO Brian Armstrong called a letter sent from lawmakers to the companies in question “ridiculous” and “un-American.”
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