Commission to present ‘strong’ rules for Facebook’s Libra
The European Commission will present later this year new rules to develop a “sound” crypto-asset market in the EU, including for stablecoins such as Facebook’s digital currency Libra, financial services commissioner Valdis Dombrovskis, said on Tuesday.
Crypto assets have brought benefits to consumers and businesses by offering cheaper and faster payments. But regulators are trying to catch up with the fast developing market of these digital currencies.
**Libra maintains 2020 approval target despite concerns
Facebook-sponsored digital currency Libra is determined to getting the green light by European regulators next year, despite the numerous concerns raised by EU finance ministers, a senior representative of the project told EURACTIV.com.**
“The lack of legal certainty is often cited as the main barrier to developing a sound crypto-asset market in the EU,” said Dombrovskis in the Digital Finance Outreach conference.
To address this regulatory gap, the Commission will put forward legislation in early autumn to try to balance the need of rules to protect customers without hampering the innovation of a developing sector.
“I believe that Europe is in a position to lead the way on regulation,” said Dombrovskis.
Current EU law partly covers some crypto-assets, although the EU executive also intends to make some “adjustments to make sure that they remain fit for purpose”, he added.
In order to fine-tune the existing rules, the Commission will create a ‘sandbox’, a pilot framework with some regulatory flexibility for experimentation “but well-framed and under close supervisory oversight”, he added.
For those assets which are not covered by current EU law, the Commission will create a specific regime and a passport system for crypto-assets markets.
“The aim is to make sure that risks are addressed, and that investors and users have a clear understanding of them,” Dombrovskis explained.
Commission wary of side effects of Libra regulation
The European Commission has called for a “proportionate” and differentiated approach to regulating digital currencies including Facebook’s Libra, as the EU needs to preserve is developing Fintech environment.
Proportionality
Under this new regime, rules will be proportionate to the level of risks. Less risky projects will face lighter rules, while for global crypto-currencies such as Libra, rules would be stronger, given that they are likely to raise challenges in terms of financial stability and monetary policy, warned Dombrovskis.
Libra is a ‘stablecoin’, a particular type of crypto-currency pegged to one or a basket of sovereign currencies like the euro.
The crypto-currency rules will be part of the new digital financial strategy for Europe to be announced later this year.
The goal of the strategy will be to deepen the single market for digital financial services, to address the barriers to scaling up startups in this field, and to make full use of digital identities.
The strategy will also promote the concept of ‘open finance’, similar to the existing concept of ‘open banking’ to support a data-driven financial sector.
The Commission will also strengthen the EU cybersecurity rules by putting forward new standards in early autumn for all financial institutions to bolster their operational resilience.
“Cybersecurity remains a top EU priority”, Dombrovskis stressed.
Europe moves towards a common approach to regulate cryptoassets
European decision-makers and regulators are progressing towards an EU approach for dealing with cryptoassets, digital assets that use cryptography such as Bitcoin and represent a booming market still viewed with concern by financial supervisors.
[Edited by Benjamin Fox]
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Por: Jorge Valero
Fonte: EurActiv, em 23 de Junho de 2020
https://www.euractiv.com/section/economy-jobs/news/commission-to-present-strong-rules-for-facebooks-libra/
