EU banks demand from the European Commission to implement drastic regulations for cryptocurrencies. Reuters reported that Germany, Italy, France, the Netherlands, and Spain; demanded these rules in the name of users of cryptocurrencies. They are thinking the consumers are unprotected. But the other, and it seems a bigger reason, is that they want to protect the state autonomy in monetary policy in monetary policy, as Reuters is reporting.
The finance ministers of these EU member countries saw stablecoins as the main issue. They wrote in a joint statement that stablecoins shouldn’t be permitted in the Union. Currently, this supra-national organization consists of 27 states. Ministers stated that stablecoins shouldn’t be existing inside its borders until, as they see, regulatory and legal issues have been resolved.
To remind, stablecoins are a sort of cryptocurrency but backed by fiat money. The first issue appeared last year when Facebook announced its Libra coin.
EU banks didn’t make decision suddenly
Actually, ministers had almost seven months of video conferencing due to the Covid-19 pandemic. Last Friday, September 11, the ministers had the first face to face meeting in Berlin (Germany). Their cryptocurrency proposal demands strict requirements for those they see as seemingly having more risks. They pointed out particularly the stablecoins.
According to Reuters, the ministers said stablecoin dispensers should be registered in the EU.
German Finance Minister Olaf Scholz said that they (finance ministers) all “agree that it’s our task to keep financial markets stable” and added ministers’ expectations from regulators to ban private sector projects if certain requirements are not met, reported Reuters.
The EU to form a group to control cryptocurrencies
The step further in the aim to supervise cryptocurrencies is to form a regulatory group or body. The Europian Commission outlined the document that includes the decision of the EU to create a supervisor body. Their job would be to control cryptos.
The EU banks’ special attention is on Libra. They assumed Libra could destabilize fiscal policies, support money laundering, and be detrimental to individual privacy. Thanks to them the whole Libra project has been delayed for now, as its governing body and issuer is registered in Switzerland, a non-EU state.
EU banks are not against digital money
The stated goal of these ministerial decisions is to provide proper assurances to crypto users and investors. Market integrity and financial stability is what they want, at least they said so. Some of the EU states like Malta, France, and Germany, created the laws under new standards.
Additionally the head of European Central Bank Christine Lagarde, at the online conference last week spoke positively about the concept of a digital version of Euro. Such “central bank digital currency”, according to her could make financial transactions more efficient. She pointed out in the mentioned speech that innovations in the field of financial products would move the Eurozone to the forefront of the financial world. Theoretically, CBDC could be designed for widespread public use. Not just for the institutions of financial sectors. She has stated that such a concept is nothing new, as the banks “have been able to access central bank money for decades”.
The European Commission plans to introduce the new regulatory suggestions by the end of this month.
