Reuters reported recently that EU lawmakers think crypto needs new and unified crypto legislation. It was recommended by European Union’s finance commissioner Valdis Dombrovskis who believed that new rules are necessary to regulate digital assets such as Facebook-led Libra.
Valdis Dombrovskis is the EU’s financial service commissioner and is one of the 28th commissioners in the European Commission from the period 2014-2019. He has been working in the financial and capital market within the EU for quite long. His view to create the new regulatory frameworks for cryptocurrency comes in a wake of rising regulatory concern over Facebook's Libra. On October 08, Dombrovskis said while seeking reappointment as the executive vice president of the European Commission;
“Europe needs a common approach to crypto-assets such as Libra. I intend to propose new legislation on this,”
If Dombrovskis reappointed, he would work to deepen Europe's economic and monetary union and look after the Commission’s financial services portfolio. Undeniably, Libra is receiving the backlashes from regulators and policymakers every new day – while France and Germany are already opposing the coin, stating it could limit their monetary sovereignty, Dombrovskis thinks that regulating digital assets can tackle “unfair competition, cybersecurity, and threats to financial stability”.
Although Libra’s launch is still in limbo, Dombrovskis thinks that it is more likely to pose risks to financial stability due to the large user base that Facebook currently has. He further concerned that Facebook’s proposed coin could be used by Facebook’s millions of users in Europe. According to him, the new rules, if he proposed after reappointment (in case), should focus on crucial aspects such as “defending the stability, protecting consumers, tackling risks of money laundering via virtual currencies”.
Facebook's attempt at launching Libra has led global regulators to rethink and restructure the financial policies and reportedly, the EU is “pushing the G20 for global action on virtual assets”. However, its worth noting that the social media giant is still striving to clear all the hurdles that regulators have and are imposing ahead of Libra launch. Henceforth the launch of Libra could be delayed than it was previously expected to launch in 2020.
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