EU Does Not Know What To Do With Facebook’s Libra Coin

Governments around the world are facing a lot of hard choices when it comes to cryptocurrency. The latest cryptocurrencies news are showing rumors that even the European Union – EU does not know what to do with the upcoming stablecoin by Facebook, Libra.

The main decision is whether governments should overregulate it and risk losing the benefits to the economy – or do nothing and make themselves vulnerable to those who step up. Right now, the European Union cannot figure out what to do about Libra.

A February 19 memo released by the Executive Vice President Dombrovskis on behalf of the European Commission shows that the Libra Association has fallen short in its responses to questions from the EU. As a result of that, any information provided by Facebook “remains insufficient for determining the precise nature of Libra and, by extension, its relation with existing EU law.”

Still, Dombrovskis also stated that the Commission are “willing to act swiftly” when it comes to harnessing the potential of crypto by arranging some regulations and oversight. Such a position reaffirms their December 5 declaration to police stablecoins and the monitoring of risk to financial stability of the region.

While EU does not know what to do with this coin, the Libra news show that the Facebook CEO Mark Zuckerberg spoke before a US House of Representatives Financial Services Committee on October 13. Lawmakers echoed similar concerns as the European Commission, citing vague answers that Zuckerberg provided regarding the digital currency. They said:

“I actually don’t know if Libra is going to work.”

Government bodies in the United States and EU are right now working on better understanding crypto. Meanwhile, 2020 is proving to be a great time for cryptocurrencies not only because of their surge but also because of their acceptance.

As all of this is happening, the Commission launched an open public consultation which will be available until March 19th, while the Internal Revenue Service (IRS) in the United States is preparing for a cryptocurrency summit which is expected to take place on March 3rd this year.

All in all, Libra is creating problems for regulators and no one knows how its future will unfold. From a regulatory perspective, Libra is not the only stablecoin but is certainly one which could become the most popular one.