Big European states call for cryptocurrency curbs to protect consumers

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FILE PHOTO: A small toy figure is seen on representations of the virtual currency on a displayed European Union flag and the Facebook Libra logo in this illustration pictureMoreBy Christian Kraemer and Michael NienaberBERLIN (Reuters) – Germany, France, Italy, Spain and the Netherlands called on the European Commission to draw up strict regulation for asset-backed cryptocurrencies such as stablecoins to protect consumers and preserve state sovereignty in monetary policy.The finance ministers of the five European Union member states said in a joint statement on Friday that stablecoins should not be allowed to operate in the 27-member bloc until legal, regulatory and oversight challenges had been addressed.Stablecoins, a type of cryptocurrency often backed by traditional assets, leapt onto policymakers’ agendas last year when Facebook revealed plans for its Libra token.Some central banks and financial regulators, concerned that Libra could destabilise monetary policy, facilitate money laundering and erode privacy, threatened to block it and the project has been delayed and reshaped as a result.The EU’s regulatory framework for stablecoins should preserve the bloc’s monetary sovereignty and address risks to monetary policy, as well as protecting consumers, the five countries said in a statement issued on the sidelines of …

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