In an interview, Aug 29, Binance co-founder He Yi claimed that the company will engage with regulators from day one regarding its Venus stablecoin project. He also confirmed previous rumors that Venus will be primarily geared towards non-Western countries.
Cryptocurrency exchange Binance has said that it will learn from the regulatory issues that have plagued Facebook’s proposed Libra digital currency.
As Cointelegraph reported last week, the Venus project will focus on creating localized stablecoins around the world. He said that Venus drew inspiration from Libra, but would take a more conservative approach, with a priority on regulatory compliance.
Learning from the mistakes of others
Since Facebook announced its Libra stablecoin project back in June, it has faced tough scrutiny from regulatory bodies worldwide. Binance says that it will handle regulators better, by focusing on compliance from the start. Yi explained:
“If we want to launch Venus in a country, we’ll make sure it complies with the regulations.”
Belt and Road stablecoins
Another aspect in which Venus will differ from Libra, is Binance’s focus on partnering with governments and companies in non-Western countries. He especially referenced China, when she called Venus a “Belt and Road” version of Libra. The geographic scope of Venus will roughly align with the Chinese infrastructure initiative.
Venus will certainly have a hill to climb if it is to gain regulatory acceptance and adoption in China itself though. Apart from Libra, it will also have competition from China’s proposed Central Bank cryptocurrency. Although the launch date for this is still unconfirmed.
ECB’s Mersch Warns Over ‘Treacherous Promises’ of Facebook Libra
Yves Mersch, executive board member at the European Central Bank (ECB), has warned of the threat posed by Facebook’s Libra to monetary policy and consumers of the cryptocurrency in the EU.
Speaking on Monday, Reuters reports, Mersch said:
“Libra could reduce the ECB’s control over the euro, impair the monetary policy transmission mechanism by affecting the liquidity position of euro area banks, and undermine the single currency’s international role.”
The centralized nature of Libra – which is planned as a stablecoin linked to a basket of fiat currencies and government bonds, and managed by the dedicated Libra Association – is also of “extreme” concern, according to Mersch. He highlighted that the coin would be accountable to shareholders, raising trust issues, and will not be backed by a central bank.
He further said Libra is being launched by the same company that “had to explain themselves in front of legislators in the United States and the European Union on the threats to our democracies resulting from their handling of personal data on their social media platform.”
Mersch called on EU regulators to bring Libra under their remit, adding that international cooperation is required to counter the perceived risks of the crypto project.
Finally, he called on Europeans not abandon the “safety and soundness of established payment solutions and channels in favor of the beguiling but treacherous promises of Facebook’s siren call.”
Mersch is the latest ECB representative to vent over the threat posed by Libra to conventional money systems. In early July, fellow executive board member Benoit Coeure said Facebook’s crypto is a “useful wake-up call for regulators and public authorities.”
“It’s out of the question to allow them to develop in a regulatory void for their financial service activities, because it’s just too dangerous. We have to move more quickly than we’ve been able to do up until now”, Coeure stated at the time.
Also in the EU, Facebook has reportedly already come under investigation by the the European Commission over antitrust issues related to the Libra project.