Libra will be the focus of the cryptocurrency regulatory framework planned by the European Union’s finance commissioner Valdis Dombrovskis.
“Common Approach” Needed, Says Commission VP
The former Latvian Prime Minister has been the Vice President of the European Commission since 2014 and said in his bid to be reappointed that the EU needs to take a unified approach to regulating cryptocurrencies. “[…] we must address risks such as unfair competition, cybersecurity, and threats to financial stability. For instance, Europe needs a common approach on crypto-assets, such as Libra. I intend to propose new legislation on this,” said Dombrovskis in a statement in Brussels this morning.
Dombrovskis comments come amidst intense scrutiny from senior EU politicians towards Facebook’s proposed digital coin. On Monday, the EU sent a questionnaire to Facebook (NASDAQ:FB) and the Libra Association seeking further clarification on how the coin will deal with financial stability, money laundering, and data privacy concerns. France and Germany, two of the leading EU nations, have said they will push to completely block Libra’s development in Europe.
PayPal Withdraws From Libra
The bad news keeps piling up for Libra, after it lost PayPal (NASDAQ:PYPL) as a backer on Friday. The payments firm said it would focus instead on its own efforts to “democratize access to financial services for underserved populations.” PayPal’s withdrawal comes after reports that several major backers were losing faith in the project, fearful that the spotlight placed on the social media giant’s proposed cryptocurrency will also bring their own separate, independent businesses into disrepute.
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US Regulatory Scrutiny
Libra is facing equally intense regulatory pushback on this side of the Atlantic, with senior US banking officials branding it a “monetary threat” in a meeting of the Federal Advisory Council last week. Members of the council include M&T Bank CEO Rene Jones and Brian Moynihan, CEO of Bank of America. These fears were reiterated by two members of the House of Representatives in a letter to the Fed’s chairman Jerome Powell.
After Facebook’s Mark Zuckerberg refused to provide a firm date on Libra’s launch, which was planned for mid-2020, it’s beginning to look as though the project will never see the light of day.
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