“So-called ‘stablecoins’ may present opportunities in terms of cheap and fast payments, especially cross-border payments. 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,” said the joint statement by the European Commission and European Council.
“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,” they continued. A regulatory regimen by the commission is presently in the works, Reuters reported.
Facebook announced Libra this past summer and hoped for a launch in the first half of 2020, but some of the largest backers of the cryptocurrency, including Visa, Stripe, PayPal and eBay, have already pulled out amid strong resistance by European states.
“The US isn’t quite happy with Libra or a number of these other so-called ‘stablecoin’ arrangements and agreements they are discussing,” web developer and technologist Chris Garaffa told Radio Sputnik’s By Any Means Necessary Friday. A stablecoin is designed to avoid the volatile price swings that have plagued cryptocurrencies since their inception.
“Ultimately, what it comes down to, in the case of Libra and some of these others, is that it’s not a government that is overseeing currency, it’s a private company, almost going back to the days of company scrip,” Garaffa told Sputnik. “You get paid, and then you spend it at the company store.”
“That’s not exactly where Facebook is going with this, but it harkens back to that memory. I’ve never been a big fan of cryptocurrency; it’s kind of a libertarian dream that just has no basis in the actual world economy. I fully understand why the EU and the EC is concerned about this, and I think the EC is going to kind of be setting an example for the rest of the world, including the US, as to where to go with regulation or even just allowing these cryptocurrencies to be used in any significant manner.”
