Facebook’s Libra has met with different reactions from different quarters, from the government, financial sectors and crypto-enthusiasts. With more than 2 billion users of Facebook, Libra, the EU believes Facebook’s Stablecoin would have massive effects on the financial system. It may upturn the whole financial system causing instability.
Europe has over 300 million Facebook users so Libra may be threatening because it would serve as a means of payment, it would squash existing protocols on money printing and thereof cause instability in the financial system.
Europe has never been so concerned making regulations on cryptocurrencies because it believed it wasn’t a big deal, but with recent debates being spurred on by Libra, the EU is reconsidering its stance by enacting new laws.
This is coming after France and Germany reiterated that Libra could limit their monetary sovereignty. This is one of the premises being drawn against Libra that it would reduce the monetary sovereignty of nations.
EU: New Guidelines on Cryptocurrency
Valdis Dombrovskis, EU’s Finance commissioners spoke in a recent law maker’s meeting how he intends to pass new rules on cryptocurrencies.
In his five years of office, Dombrovskis had never obliged the thought of passing regulations on cryptocurrencies but now he is reconsidering his stance. In the past, the conversion of cryptocurrency into fiat currency like the Euro hasn’t been so massive so Europe never had a concrete regulation plan as regards this.
From the crypto angle, Libra’s impact will be massive that it may overthrow ruling cryptocurrencies like Bitcoin.
The New Gameplan
Stemming from Libra, the EU is passing a bill to the G20 for global action on “Stablecoins”. Recall libra is a Stablecoin probably the most popular of all.
The new regulations will target financial stability as well as to put in check money laundering and likewise protecting crypto users and investors.
In this gameplan, the finance commissioner stated that no dates have been fixed yet for passing the new rules. It was also unclear if a separate body will be created to handle this or existing regulatory bodies will be brought into the game.
He also unveiled the gameplan of injecting liquidity into the economy by investing 1 trillion Euros into private and public green sectors. This he tagged “Sustainable Europe Investment Plan”
The 1 trillion Euros will be generated from the EU, the European Investment Bank, and the private sector.