France calls for Libra-like “Eurocoin” according to a report by reuters. Le Maire made the comment in a meeting with the EU finance ministers.
According to a report by reuters on this morning, France’s Finance Minister Le Maire spoke about the need to introduce regulations for the cryptocurrency sector. Calling it completely unregulated, he suggested a possible “Eurocoin” introduction as a means of facilitating the regulation. He believes that that would be the only way to curb the rise of Libra.
In a meeting with all EU finance ministers in Helsinki, the french finance minister Bruno Le Maire said that Libra could cause risks to consumers, financial stability and even “the sovereignty of European states. He strongly recommended that the EU member nations get together to create a “common framework” on digital currencies.
Libra Vs Euro Coin
The 28 nation strong EU members were considering the impact of the Libra on local currencies. The French finance minister advised against allowing it to enter Europe and introduce an EU based cryptocurrency in direct competition to Libra.
To fight the problematic influence of Libra, he suggested that they introduce a “Eurocoin” similar to Facebook’s Cryptocurrency. The proposed cryptocurrency would be a stable coin tied to the Euro currency.
New EU-wide rules came into force last year to increase checks on virtual currencies’ trading venues with the purpose of reducing risks of money laundering and other financial crime.
Definition problems
The problem with a cryptocurrency regulation is the lack of clarity with regard to its definition. The EU members are still grappling with the issue of defining what a cryptocurrency actually is. It has been suggested that cryptocurrencies be treated as securities, payment services or actual independent currencies. Most do not like the idea of cryptocurrencies getting a legal and legislative approval of being considered a currency in itself. This has led to the lack of clear direction and regulation with regard to cryptocurrencies.
Le Maire fears that Facebook’s Libra will take advantage of the vacuum and disrupt the EU economy. Before that happens, he wants to create a structure where EU based cryptocurrencies capitalize on the market effectively blocking the possible spread of Libra.
Libra Woes
Ever since its inception, Libra has faced obstacles. However, Libra is based on Switzerland and may soon be FINMA compliant. In such a case, Le Maire may be too late to the game. Carney, Governor of the Bank of England, has also made a strong pitch for the creation of a Libra-like cryptocurrency. It would be a stable coin based on fiat currency. Which is why France calls for Libra-like “Eurocoin”.
In the absence of specific regulations, EU officials are assessing whether existing rules governing financial instruments could apply, but have so far reached no conclusion.
When asked whether Libra would need a license to operate in the bloc, a spokeswoman for the EU commission told Reuters: “With the publicly available information on Libra, it is currently not possible to say which exact EU rules would apply.”
“It is likely that the project will require some form of authorization in Europe, depending on its precise features,” she added.
In Switzerland Libra is applying for a payment service license, although it could face rules that typically apply to banks, regulators in the non-EU Alpine state said on Wednesday.
[…] a statement that the EU needs its own cryptocurrency to make payments faster and cheaper. The “EuroCoin” has been proposed as a framework to bring into play competitors to the Libra. If the EU […]