14 Sep 2020
Germany, France, Italy, Spain and the Netherlands called on the European Commission to draw up strict regulation for asset-backed cryptocurrencies such as stablecoins to protect consumers and preserve state sovereignty in monetary policy.
The finance ministers of the five European Union member states said in a joint statement on Friday that stablecoins should not be allowed to operate in the 27-member bloc until legal, regulatory and oversight challenges had been addressed.
Stablecoins, a type of cryptocurrency often backed by traditional assets, leapt onto policymakers’ agendas last year when Facebook FB.O revealed plans for its Libra token.
Some central banks and financial regulators, concerned that Libra could destabilise monetary policy, facilitate money laundering and erode privacy, threatened to block it and the project has been delayed and reshaped as a result.
The EU’s regulatory framework for stablecoins should preserve the bloc’s monetary sovereignty and address risks to monetary policy, as well as protecting consumers, the five countries said in a statement issued on the sidelines of a broader meeting of European officials in Berlin.
The European Commission is expected to present its regulatory proposals later this month.
By Christian Kraemer and Michael Nienaber, Reuters, 11 September 2020
Read more at Reuters
RiskScreen: Eliminating Financial Crime with Smart Technology
Advance your CPD minutes for this content, by signing up and using the CPD WalletFREE CPD Wallet