On November 6, it has been reported by EurActiv, an EU policy site, that a draft document to be discussed at a meeting of E.U. Finance Ministers which states that “all options should be on the table”, including impeding the stablecoin’s very development.
However, the document is an initial text prepared by Finland, which currently holds the six-month rotating presidency of the EU Council.
Beyond emphasizing that preventing the project’s development remains a possible measure, the document states that Libra and similar initiatives “should not begin operation in the EU” until all challenges and risks have been identified and tackled.
It notes that currently, lack of clarity about Libra “makes it impossible to reach definitive conclusions on whether and how the existing EU regulatory framework applies.”
It has been analyzed that the two questionnaires already presented by the European Commission to Facebook, which had aimed to gather more information about the project.
The document states that EU regulators and lawmakers must now act swiftly but should equally ensure that any new rules are based on “sound evidence” and “general principles” that would be applicable to all prospective global stablecoins.
In an interview which was published on November 6, Daniel Daianu, the President of Romania’s Fiscal Council, characterized Libra as “very dangerous”.
“are part of the logic of those who believe that there is a need for parallel markets, the disappearance of central banks […] The financial crisis ruined the reputation of governments and central banks, and some think we need other currencies, parallel circuits, non-hierarchical structures […] It is not by chance that libertarians are so attached to this vision.” Daniel Daianu
He said that with its prospective billions of users, Libra “would almost inevitably fracture the monetary system” rendering central banks’ policies ineffective.
Beyond cryptocurrencies and stablecoins, which must be “very strictly regulated,” Daianu went further by declaring that harsher macro-prudential measures which will be necessary if Central Bank is to successfully implement their policies.
“I am for a very severe regulation of capital markets, of what is called the shadow banking sector. In the future, monetary policy will be a mix of a pragmatic inflation targeting and the control of monetary aggregates […] because we are trying to put a stop to the movement of money in the economy.” Daniel Daianu
Thus, the emergence of Libra has prompted the EU’s consideration of launching a potential bloc-wide Central Bank digital currency.