The European Union is preparing a new cryptocurrency regulation which could include stricter requirements for "global stablecoin" projects such as Libra.
Europe strengthens its international position in the crypto sector
One of the main exponents of the ministry of the economy of the European bloc, Valdis Dombrovskis - or to give him the full title, the executive vice president of the European Commission for An Economy that Works for People - said that Europe has felt the duty to seize the opportunity to become one of the main regulators in digital finance.
"This is a good opportunity for Europe to strengthen its international position and become a global standard, with European companies leading the new digital finance technologies," he said during a speech to the Digital Finance Outreach 2020 last week. .
And the first test case, said Dombrovskis, would be cryptocurrencies. Although some cryptocurrencies, such as security tokens, are fairly covered by European law, other entire categories, especially stablecoins, remain completely unregulated.
"The lack of legal certainty is often cited as the main obstacle to developing a solid crypto-asset market in the EU," said Dombrovskis. Some EU members have taken matters into their own hands, worsening market integration and making it difficult for companies to operate across the trade bloc.
A new regulatory regime for cryptocurrencies will not only cover unregulated digital assets but will consolidate and homogenize existing standards across the continent, Dombrovskis said. He did not say much about what the future regulatory regime might look like, although he did stress that it would support and stimulate innovation.
The focus on "Global Stablecoins"
A pilot experiment would allow regulators to provide space for monitoring and observation of new solutions, he said. Although Dombrovskis' speech contained few details, it is clear that the EU is particularly keen to introduce stricter rules on any project deemed a "global stablecoin".
What exactly Dombrovskis means by "global stablecoin" is not immediately clear. It appears that he is referring to one of the key components used in place of traditional currencies that can facilitate more transactions across national borders.
This could be a consequence of initiatives such as Facebook's Libra. Stablecoins, perhaps like Libra, operating on a global scale can "raise further challenges," said Dombrovskis - they can disrupt financial and monetary stability.
“Overall, our approach will be proportionate and related to the level of risk. This means lighter rules for less risky projects, "concluded Dombrovskis. In the case of global stablecoins, such as Libra, "their potentially systemic role [means] that our rules will be stronger."
So the European Union is preparing for a transition that seems inevitable. And are you already switching to Bitcoin? How did you decide to buy Bitcoins? Let us know in the comments below.
