The looming release of Libra appears to have scared the European government and financial authorities straight, as they are now even considering the issuance of digital currency, in response to Zuckerberg’s “devious” plans to hack that global financial system with the help of the infamous cryptocurrency.
According to the reports from various reputable European news outlets, the EU regulators and finance minister have had several backroom meetings, during which they elaborated a draft of a plea to the European Central Bank (ECB), as well as to a number of major national banks, in which they ask the financiers to consider the possibility of developing a proprietary digital currency that would be capable of withstanding the threats posed by Libra.
Moreover, the document includes suggestions to the financial regulators concerning the possible prohibition of blockchain-related startups that are deemed “too risky” by the corresponding authorities. The finance ministers have around a month to review and adopt the draft to the current legislative framework of the European Union. Should that happen, it would mark the beginning of an all-out regulatory war against the social media corporation, in which other cryptocurrencies might become collateral victims.
Right now, the governments of some EU member states have imposed a relatively lax regulation on cryptocurrencies, while others are still keeping them in the grey area. However, that could change radically if Libra will keep pushing for the launch next year, as per the earlier announcement made by Libra Association.
The mentioned draft, signed by the representatives of Finland, who are currently presiding in the European parliament, appeals to ECB to explore the possibility of introducing a digital currency backed by fiat that could pose an insurmountable challenge for Libra, or, in the best-case scenario, render it obsolete. The bank must also explore all challenges associated with the incorporation of such a coin into the European financial system, along with the ways to beat Libra to the punch. Should ECB deem this task feasible, it also should develop a roadmap that includes a list of specific steps towards its accomplishment over the course of the coming months.
It appears that this draft totally plays into the hands of the officials at the European Central Bank since its board member Benoit Coeure has been talking about the need for his bank to step up its game on the threshold on the inevitable clash between Facebook and global regulators.
According to Coeure, the full realization of this grandiose project would open the possibility for the customers to use a digital currency, stored directly on the ECB accounts, to make payments or purchases at the absence of any intermediaries and clearing counterparties. Moreover, those who decide to use this digital coin - which hasn't been named yet, through the crypto community has already dubbed it EuroCoin - won’t even have to open an account in this bank.
The draft also reiterates the concerns expressed at the latest G7 summit regarding privacy coins like Monero and Zcash, which are allegedly used at an increasing scale for the purposes of money laundering and tax evasion.
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