The European Union is making ready a brand new cryptocurrency regime that would embody stricter necessities for “global stablecoin” tasks, resembling Libra.
The bloc’s lead economics minister, Valdis Dombrovskis – or to offer him his full title, the European Union’s Govt Vice President of the European Fee for An Financial system that Works for Individuals – mentioned Europe needed to seize the chance to turn into one of many predominant rule-makers for digital finance.
“This is a good chance for Europe to strengthen its international standing and to become a global standard-setter, with European companies leading new technologies for digital finance,” he mentioned throughout a speech on the Digital Finance Outreach 2020 earlier this week.
And their first check case, Dombrovskis mentioned, could be cryptocurrencies.
Though some cryptos, resembling safety tokens, are fairly well-covered by European regulation, complete bundles of them, most notably stablecoins, stay fully unregulated.
“Lack of legal certainty is often cited as the main barrier to developing a sound crypto-asset market in the EU,” Dombrovskis mentioned.
Some EU members have taken issues into their very own fingers, which damages market integration and makes it troublesome for firms to function throughout the entire buying and selling bloc.
A brand new regulatory regime for cryptocurrency won’t solely cowl unregulated digital property, however it would additionally consolidate and homogenize present requirements throughout the continent, Dombrovskis mentioned.
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Set to be unveiled later this 12 months, Dombrovskis, who was previously the prime minister of Latvia, didn’t give a lot away on what the longer term regime would possibly appear to be, though he emphasised that it might help and stimulate innovation.
A pilot scheme would permit regulators to supply an area for brand spanking new experimental options to be monitored and noticed, he mentioned.
Whereas Dombrovskis’ speech contained few specifics, he did say that the EU was notably eager to deliver stricter guidelines on any venture deemed to be a “global stablecoin.”
What precisely Dombrovskis means by “global stablecoin” isn’t instantly clear. Nonetheless, it seems one of many key parts is that it’s used as a substitute of conventional fiat currencies and might facilitate a larger variety of transactions that cross nationwide borders.
That is perhaps an inference to initiatives resembling Facebooks’ Libra. Stablecoins, presumably like Libra, that function on a world scale can “raise additional challenges,” Dombrovskis mentioned – they’ll disrupt monetary and financial stability.
“Overall, our approach will be proportionate and relate to the level of risk. That means lighter rules for less risky projects,” Dombrovskis concluded. Within the case of world stablecoins, resembling Libra, “their potentially systemic role [means] our rules will be stronger.”
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