As much as regulators don’t want to allow cryptocurrencies to be on par with fiat, they are also willing to accept the fact that digital currencies are almost certainly going to be the future. After seeing what is planned with Facebook’s Libra stablecoin, financial leaders in the European Union (EU) are now calling for discussions on the possible launch of a digital euro, which would counter private stablecoins such as Facebook’s offering.
According to Reuters, the presidency of Finland has drafted and presented a plan to develop a European stablecoin. The Finnish government also emphasizes in its paper that an EU-wide framework for crypto should be adopted by financial regulators in order to ensure all countries are on the same page.
The document reads, in part, “The [European Central Bank] and other EU central banks could usefully explore the opportunities as well as challenges of issuing central bank digital currencies including by considering concrete steps to this effect.” If EU countries like what Finland has prepared, when their finance ministers meet this Friday, the proposal could be accepted as early as next month.
Private stablecoins like Libra may be more closely related to securities than to currency. The International Organization of Securities Commissions (IOSCO) got together on October 30 to discuss the subject, among others, and took a long, hard look at the impact private stablecoins could have, as well as whether or not regulations for the securities market should apply. The takeaway by IOSCO’s board was yes, regulations should apply, and it supports initiatives already addressed by the G20 to provide better oversight of the space.
The Chair of the IOSCO board, Ashley Alder, explains, “Our analysis has shown that so-called ‘stablecoins’ can include features that are typical of regulated securities.