The ministers agreed in a joint statement Thursday that:
No global stablecoin arrangement should begin operation in the European Union until the legal, regulatory and oversight challenges and risks have been adequately identified and addressed.
Like most official statements surrounding the Libra project thus far, the EU finance ministers are careful to give lip service to potential benefits. “Technological innovation can produce great economic benefits for the financial sector, promoting competition and financial inclusion, broadening consumer choice, increasing efficiency and delivering cost savings for financial institutions and the economy at large,” the statement reads.
However, promotion of concepts like financial inclusion is soon tempered with commonly repeated regulatory lines when it comes to cryptocurrencies:
At the same time, these arrangements pose multifaceted challenges and risks related for example to consumer protection, privacy, taxation, cyber security and operational resilience, money laundering, terrorism financing, market integrity, governance and legal certainty.
The statement ends by turning the focus away from private solutions to state-sponsored initiatives like Central Bank Digital Currencies (CBDC) and praising the European Central Bank (ECB). “We note that the ECB and other central banks and national competent authorities will explore further the ongoing digital transformation of the payment system and, in particular, the consequences of initiatives such as “stablecoins”. We welcome that central banks in cooperation with other relevant authorities continue to assess the costs and benefits of central bank digital currencies…”
The joint statement comes as the Commission is reportedly working on stablecoin regulation already, with VP Valdis Dombrovskis saying in a speech: “Today the Ecofin endorsed a joint statement with the Commission on stablecoins. These are part of a much broader universe of crypto assets … A number of Member States like France, Germany or Malta introduced national crypto asset laws, but most people agree with the advice of the European Supervisory Authorities that these markets go beyond borders and so we need a common European framework.”
When the EU and governments worldwide will finally be ready for Libra, if ever, remains to be seen. As a large chunk of major league members have left the Libra Association already — such as Paypal, Visa and Mastercard in recent months — the project has no shortage of challenges as it continues pushing forward.
What do you think of the EU Finance Ministers’ joint statement? Let us know in the comments section below.
Images credits: Shutterstock.
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