Libra is scaring the European governments as Facebook and two dozen firms look forward to the launch of the stable coin in early 2020. The Executive Vice President of Designate an Economy that Works for People and European Union’s financial commissioner, Valdis Dombrovskis, called on the union to set up laws to regulate crypto assets arguing the launch of Libra may destabilize the financial industry in the region.
In a confirmation hearing on his re-election to the financial board, Valdis said he will propose new laws to govern the cryptocurrency industry – especially the upcoming Facebook-backed cryptocurrency, Libra. Valdis said,
“Europe needs a common approach on crypto-assets, such as Libra. I intend to propose new legislation on this.”
Europe’s fear of Libra Cryptocurrency
France’s financial mister and financial authorities in Germany have shown concern on Libra’s perceived influence on its monetary policy. With over 2 billion people under Facebook’s wing, Libra is expected to become the largest cryptocurrency surpassing Bitcoin once it launches.
The EU has however been surprisingly mum on the subject of cryptocurrencies in the past. This may be attributed to the minimal use and value the industry contributes to its financial system as seen with Valdis’ latest comments. Despite being in the commission for the past five years, Dombrovskis did not raise any issues with the digital asset industry, well, until Libra.
In his speech he made it clear to the lawmakers that his latest proposal stems from Facebook’s plans to launch Libra token. He believes the launch of the token could have systemic effects on the financial stability of the European Union.
The Latvian commissioner further called on crypto regulation to focus on tackling money laundering, protecting consumers and investors, and ensuring financial stability.
A US National Security Issue
As countries look for the best way to deal with Libra’s upcoming launch, the US is part of the regulation-uncertain areas. The House of Representatives financial commission recently asked for the company to halt the development of Libra.
However, on Oct. 7, a former DoJ attorney and Andreessen Horowitz crypto fund manager, Katie Haun, said a ban on the stable coin could constitute to a national security risk as other competitor countries develop their own digital assets.