EU Is Yet To launch Digital Currency But Set To Regulate Stablecoins
Current developments have proved that Blockchain is not among the over-emphasis technologies. At the moment, its adoption in the mainstream is evident.
However, there are hypes and extreme speculations in the system, but that is not the subject of this article. One such hype is announcing a Eurocoin, EU digital currency by the EU Central Bank.
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EU Proposed Regulation Will Be For The National Interest
In a previous publication, titled “Blockchain for National Interest,” we looked at how nations should approach Blockchain. Here, the EU is taking a significant step that will shape and intensify the adoption of Blockchain in the region.
By the way, the region has a progressive record of sponsoring research and development of Blockchain projects. Instead of first launching an EU own digital currency, they announced strengthening the regulatory framework to check high-risk projects.
Yes, the EU could be launching its digital currency soon, as opined by Reuter, but that is not confirmed. The commission on November 5, unveiled a draft and urged member states to compile and develop an approach to Cryptocurrencies.
Therefore, the plan will help EU member states to regulate stablecoins and check high-risk projects.
Is EU Regulation Response to Libra?
Many believe the draft and its amendments are in response to Libra, a proposed international stablecoin by Facebook Inc. Nonetheless, the guess could be accurate since the announcement of Libra In late June, drew the attention of the international community, including the US Congress and the G7.
Meanwhile, the launch of Libra is a blessing in disguise as many countries are indicating interest in Blockchain. Consequently, they are, in turn, shaping their regulatory framework to include digital assets and stablecoins.
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Although it is not public if the EU draft is in response to Libra, however, the timing and the opinions make it a suspect. It seems they see a launch of a sovereign currency by a corporation, who has no provision for regulatory laws, as a threat.
By this, you can infer if the EU draft to regulate stablcoins is a response to Libra. On the other hand, the G7 expressed concerns on the risk of private virtual currency, citing it as a tool to launder money, fund terror, breach customer protection, and cyber threats.
Therefore, the discussion and adoption of the draft, prepared by the Finnish EU presidency, is scheduled on Friday, November 8, and December 5, respectively, according to Reuter. Hence, the outcome of the meeting, as stated, with the finance minister, will confirm whether the EU is set to launch its digital currency or regulate stablecoins.
In as much as the EU draft will place a ban on Blockchain projects, it will further ensure that projects have national recognition. Regulation of stablecoins will help check for high-risk Blockchain projects.
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