EU Can’t Decide What to Do with Libra

Published at: Feb. 20, 2020

Governments around the world are facing hard choices when it comes to cryptocurrency: overregulate it and risk losing the benefits to the economy, or do nothing and make themselves vulnerable to those who step up. Currently, the European Union can’t figure out what to do about Libra, the digital currency set to be released by Facebook in 2020. 

According to a Feb. 19 memo released by Executive Vice-President Dombrovskis on behalf of the European Commission, the Libra Association has fallen short in its responses to questions from the EU. As a result, any information provided by Facebook “remains insufficient for determining the precise nature of Libra and, by extension, its relation with existing EU law.”

However, Dombrovskis also stated the Commission are “willing to act swiftly” when it comes to harnessing the potential of crypto by arranging regulations and oversight. Such a position reaffirms their Dec. 5 declaration to police stablecoins and monitor any risk to financial stability of the region. 

Regulatory Backlash to Digital Currencies in the United States 

Facebook CEO Mark Zuckerberg spoke before a U.S. House of Representatives Financial Services Committee on Oct. 13 last year. Lawmakers echoed similar concerns as the European Commission, citing vague answers Zuckerberg provided regarding the digital currency:

“I actually don’t know if Libra is going to work.”

Government bodies in both the United States and the EU are working on better understanding crypto. The Commission launched an open public consultation that will be available until March 19th, while the Internal Revenue Service in the United States is preparing for a cryptocurrency summit on March 3rd.

Tags
Regulation
Cryptocurrencies
Government
European Union
Libra
Related Posts
Blockchains Are an Excellent Solution for Privacy, Part 3
Some entrepreneurs have been trying to increase data privacy by combining encryption and blockchain technology. There are projects like Oasis Labs and Enigma that focus entirely on preserving users’ privacy. Meanwhile, others have been focusing on preventing data retention by companies. Thus, there is no way to guarantee that personal data is deleted in a company’s data system. Blockchain technology’s reliable consensus ensures that people’s data is used correctly. Protection against software and hardware attacks Companies like Oasis Labs, which designed the Ekiden system, run smart contracts outside the blockchain within a Trusted Execution Environment, or TEE, node to enable …
Blockchain / June 22, 2020
3 Common Compliance and Regulatory Pitfalls to Watch for in 2020
Regulations are not going anywhere. On the contrary, financial service providers face more regulatory challenges and higher costs than ever before. During the early days of cryptocurrencies, a “Wild West” culture emerged when regulators, uncertain on how to tackle this thing called blockchain, paid little attention to the thefts, scams and hacks plaguing the virtual-asset market. Today, this is no longer the case. No matter their roots, every virtual asset project from Telegram to Shapeshift to Libra is ramping up compliance while regulators continue to issue guidance, enforce regulations and pay closer attention to digital securities platforms, crypto exchanges and …
Technology / May 30, 2020
French official wants to change how Europe regulates crypto and blockchain
France’s top financial regulator has proposed to change the way the cryptocurrency industry is supervised in Europe. Robert Ophèle, chairman of Autorité des Marchés Financiers, addressed crypto-realted regulatory issues at the 5th Annual Conference on FinTech and Regulation. The official argued that financial supervisors must take a new approach in regulating blockchain-based financial instruments due to massive growth in the market. Ophèle proposed that the European Securities and Markets Authority, or ESMA, should be the responsible authority for this new area of regulation and supervision. Ophèle emphasized that the current stage of regulation in the European Union would make it …
Blockchain / Feb. 9, 2021
French Financial Regulator Responds to EU’s Crypto Consultation
As the European Commission finished its public consultation on cryptocurrency assets in March, France’s major financial regulator stepped in to express its stance on the matter. The Autorité des Marchés Financiers (AMF), the stock market regulator in France, has published an official response to the EC consultation, outlining some basic proposals regarding their own vision for crypto assets within the EC’s approach. It’s too early to establish a classification of crypto assets In an April 7 statement, the AMF argued that the classification of crypto assets should be based on the existing categories in order to differentiate between crypto assets …
Regulation / April 9, 2020
MiCA coming in hot in October, NFTs not in focus: EU regulators
Members of the Germany-based Bundesblock, otherwise known as the German Blockchain Association, updated the community on the upcoming Markets in Crypto-Assets (MiCA) regulations in a virtual panel held on Thursday, Sep. 1. According to the panel, the final legal text for the long-awaited regulations is set to be released in the upcoming 4-6 weeks. However, nonfungible tokens (NFTs) and stablecoins are still not covered, while crypto asset service providers (CASPs) are discussed in scope. @bundesblock panel discussion of #MiCAR with @DrStefanBerger, @SchildtMoritz, @paddi_hansen, moderated by Alireza Siadat. Key take aways: final text of MiCAR available in 4-6 weeks, MiCAR fully …
Blockchain / Sept. 2, 2022