“Europe needs a common approach on crypto-assets such as Libra,” Valdis Dombrovskis told EU lawmakers in a confirmation hearing. “I intend to propose new legislation on this.”
The EU doesn't have particular regulations on cryptocurrencies, which, until Libra was released in June, had been considered a marginal issue by most decision-makers because only a fraction of bitcoins or other digital coins are translated into euros. Dombrovskis has resisted regulating digital currencies in the five years he has served so far. He have cleared his change of heart stemmed from Facebook’s plans for Libra, a digital currency that “could have systemic effects on financial stability,” he told lawmakers.
The EU is now also stressing the G20 for global action on “stablecoins,” an EU document circulated last week said. Facebook’s planned Libra is the best-known of the stablecoins - cryptocurrencies backed by assets like conventional money deposits, short-term government securities or gold.
Libra’s scale would likely pose issues, Dombrovskis said, seeing that Facebook’s millions of users in Europe would be able to pay with the new digital currency. An EU Commission official said there was no timetable yet for advising the new rules. Dombrovskis said the crypto regulation should focus on protecting financial stability, protecting consumers and tackling the risks of money-laundering using crypto-assets, which can easily cross borders.
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