By On November 5th, 2019, an EU draft document that was seen by reporters stated that the European Central Bank (ECB) should explore the feasibility of launching a native digital currency for the region.
This comes as plans by Facebook to introduce a private digital coin (Libra) were met with a hostile response from global regulators.
Euro Regulators and other participants in this year’s G7 meeting indicated that stablecoins such Libra should be strictly regulated and the risks connected with them are not yet studied well.
EU lawmaker Markus Ferber stated:
“At the very least, we need a robust regulatory framework to deal with virtual currencies.”
He added that with the looming threat of Libra on the horizon, it was time for the EU to act.
The draft document also urges that ECB should issue its cryptocurrency which would compete with large U.S. corporations. That indicates the EU countries are starting to take steps of protection from Facebook’s Libra project.
Libra Prompting Europe Into Action
Europe, in particular, has been extremely hostile towards Libra, although European Central Bank director Benoit Coeure has previously stated that they do not quarrel with the concept of a stablecoin.
The recent EU draft document now reiterates the G7 concerns over the risks that private currencies like Libra pose, citing money laundering, consumer protection, taxation and others.
The draft not only asks the ECB to think about a native digital currency but also recommends a unilateral cryptocurrency framework, that bans high-risk projects and tokens.
ECB to Cut Out Intermediaries in Digital Payments
According to ECB officials, the proposed EU cryptocurrency would allow consumers to use electronic cash, which would be directly deposited ECB hosted wallets.
This would cut out the need for bank accounts, financial intermediaries or clearing counterparties, enabling the customers to transact directly with each other in seconds.
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