EU Finance Commissioner Vows New Rules on Crypto

The former Latvian prime minister has been a vice president of the European Commission for the euro and social dialogue since 2014. He is one of the 28 commissioners in the European Commission from 2014 to 2019 and has been in charge of financial stability, financial services and capital markets within the EU.

Valdis Dombrovskis, the European Union’s financial services commissioner, said he intends to create a new regulatory framework for cryptocurrencies, particularly Facebook’s Libra stablecoin.

“Europe needs a common approach on crypto-assets such as Libra. I intend to propose new legislation on this”, Dombrovskis said in a confirmation hearing seeking for reappointment on Tuesday with EU policy makers.

Dombrovskis’ comment comes on the heels of an increasing level of scrutiny by the European Commission over Facebook’s Libra cryptocurrency initiative.

The Financial Times reported on Monday that the commission last week sent a questionnaire to Facebook and the Libra Association, asking them to address various questions regarding financial stability, money reserve and private risks related to Libra.

According to the report, the questioning was part of a push by Dombrovskis to examine how the EU should allow or regulate crypto initiatives like Libra and whether new laws will be in need. It said Dombrovskis has indicated there is a “strong willingness to act at an EU level” when it comes to Libra.

Just last week, Paypal, one of the big-name members in the Libra Association, formally withdrew from the Facebook-led initiative.

ECB President: Stablecoins and Crypto Not Suitable Money Substitutes

Mario Draghi, president of the European Central Bank (ECB) shares his views on stablecoins, the future of crypto assets, and possible digital form of the Euro.

Monitoring developments in crypto

On Sept. 27, in a letter addressed to European parliament member Eva Kaili, ECB president Mario Draghi noted that the European System of Central Banks (ESCB) is closely monitoring developments in the cryptocurrency industry. Draghi added:

“The ESCB is analysing crypto-assets and stablecoins with a view to understanding their potential implications for monetary policy, the safety and efficiency of payments and market infrastructures, and the stability of the financial system.”

Despite displaying a positive approach towards new technologies, Draghi apparently thinks that stablecoins and cryptocurrency in general are of little value. He said:

“Thus far, stablecoins and crypto-assets have had limited implications in these areas and are not designed in ways that make them suitable substitutes for money.”

Draghi did add that due to the continuous technological innovation and rapid evolution in the cryptocurrency industry, the ECB’s assessment might be different in the future.

Digital Eurocoin looms?

Draghi also addressed the opportunities and challenges that come with releasing a digital form of the Euro coin. He pointed out that the technological part of a European stablecoin is not the issue, but “rather its utility in terms of costs and benefits to the public.”

Draghi concluded his letter by pointing to Target Instant Payment Settlement service for the Eurozone, which was launched in November 2018, adding:

“It enables payment service providers to offer fund transfers to their customers in real time and around the clock, every day of the year.”

Cointelegraph reported on Sept. 24 that French Finance Minister Bruno Le Mairesuggested that Europe should launch its own digital currency. Le Maire said that he would discuss the feasibility of a European public digital currency with his counterparts.

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