Why commission is keen to bar Facebook Libra in EU?

Valdis Dombrovskis, a Latvian politician, thinks that Europe (EU) has to observe a common approach and possibly ban Facebook Libra in the EU along with similar cryptocurrencies.

He is also the nominee for Executive Vice President-Designate of the European Commission, and he has stated that he intends to introduce legislation for this purpose.

Not a red carpet welcome for Facebook Libra in EU

The two countries, Germany and France, believe that Libra would grow bigger than cryptocurrencies like the Bitcoin, and this may restrict their financial supremacy.

The European Union does not have regulations for crypto-assets, which was not considered an issue by the union’s lawmakers until Facebook announced its upcoming cryptocurrency in June 2019.

This is primarily because only a portion of the Bitcoins is exchanged for Euros.

Valdis Dombrovskis, the former Prime Minister of Latvia, has not supported proposing regulations for cryptocurrencies in the past.

The European Union (EU) is striving to push the G20, which is an international forum for the governments and central bank governors from nineteen (19) countries and the EU itself.

The European Union is hoping for global action regarding stablecoins. Stablecoins are cryptocurrencies that are developed to minimize the coin’s volatility, and Libra is characterized as a stablecoin while being backed by money deposits and government securities or even gold.

Europe is likely to see new issues with Facebook Libra in EU, and the new cryptocurrency will produce risks, as the social media giant has millions of users all around the world, specifically in Europe. These users will be allowed to pay with Libra.

While an official from the European Union Commission has implied that it is not confirmed whether

Dombrovskis has stated that the new regulations are supposed to defend the union’s financial stability, protect its consumers, and fight any risks and problems of money-laundering and theft by the use of cryptocurrencies. He added that the European Union needs to focus on defending itself from any sort of financial crime.

Valdis Dombrovskis mentioned observing a lot of merits while directing supervision towards a European Union body, though he did not clarify if this meant new agencies to fight money-laundering or improving the current agencies.

Dombrovskis has promised to provide Europe with a sustainable investment plan. He aims to achieve over one trillion euros (€1T) in terms of public and private investments in the next ten (10) years. He explained that the investment plan would be based on funding from the European Investment Bank and the European Union Budget, while the majority of the funds will be gathered from the private industries.