European Union’s financial services commissioner Valdis Dombrovskis revealed his plans to create a new regulatory framework for cryptocurrencies, particularly Facebook’s Libra stablecoin.
„In the area of finance, the new technologies bring huge potential – for example, by giving consumers better and faster access to finance.”, said
Dombrovskis , who is also vice-president of the European Commission.
„I will put forward a new strategy for Europe to get the best out of FinTech and compete globally. Instant payments are a good example. At the same time, we must address risks such as unfair competition, cybersecurity, and threats to financial stability. For instance, Europe needs a common approach on crypto-assets, such as Libra. I intend to propose new legislation on this.”, he told Union members at a confirmation hearing on Tuesday.
The comments of Dombrovskis comes after the European Commission has scrutinized Facebook’s Libra. Last week, the Financial Times reported that it sent a questionnaire to Facebook and the Libra Association, asking them to address different questions on financial stability, money reserve, and private risks related to Libra.
„The probe was reportedly a part of Dombrovski’s plan to determine how the EU should allow and regulate crypto initiatives such as Libra and if new laws are needed.”, according to tokenpost.com
Earlier this month, the House of Representatives Financial Services Committee invited the social media giant’s CEO Mark Zuckerberg to testify on its highly ambitious Libra cryptocurrency project. In addition, both Germany and France have also threatened to block Libra as they see it poses a threat to the “monetary sovereignty” of governments.
The increasing backlashes Facebook is facing have also caused its major supporters to back out. The first to withdraw from the initiative is the digital payments giant PayPal.
Meanwhile, amid the growing tension, CoinFLEX decides to let Libra doubters place their bets on whether or not Libra will launch by the end of 2020.
„Though Libra has met with fierce resistance from central banks and supervisory authorities and might never see the light of day, in many other cases tech firms (both start-ups and established big players) have successfully captured bits and pieces of universal banks’ traditional value chain. This trend may only intensify in the coming years. In this environment, European banks remain squeezed.”