The European Union (EU) has reiterated its tough stance against private digital currencies like Libra, which is proposed to be launched by Facebook in the middle of next year.
Ever since Facebook disclosed its proposal in June this year, most EU nations have been vehemently opposing the project on the basis that Libra may pose some risks to the financial sovereignty of their countries.
Now, EU Finance Ministers at a meeting in Brussels on December 5 have resolved that private digital currencies like Facebook’s Libra should not be allowed in the 28-nation EU until the risks they could pose are identified and addressed.
In a joint statement after the Brussels meeting, EU Finance Ministers stated that no global stablecoin arrangement should begin operation in the EU until legal, regulatory, and oversight challenges and risks are adequately addressed. EU Finance Ministers stressed that there is a need to ensure legal clarity about the status of stablecoin arrangements and entities that intend to issue stablecoins in the EU.
Without mincing words, the EU announced that stablecoins should not undermine existing financial and monetary order as well as monetary sovereignty in the EU; and tackling the challenges raised by global stablecoins requires a coordinated global response.
In June this year, Facebook announced that Libra – a new digital coin backed by four official currencies and available to billions of social network users around the world – would be launched next year. Ever since that news broke, several countries in the EU have been openly expressing their concerns about the threat Libra poses to the financial stability of their countries.
Major EU countries such as France and Germany have also publicly criticized the social media giant’s Libra project. France’s Finance Minister said that the European Union should create a common set of rules for virtual currencies, currently largely unregulated in the bloc, to counter risks posed by Libra.