EU issues stablecoin ban: Risks cleared before any "global stablecoin" allowed to operate in the EU

Compilation: Youyou Finance-Trail

Source: consilium

Yesterday (December 5), the Council of the European Union and the European Commission issued a joint statement stating that until "the risks caused by stable currencies against currency sovereignty" have been resolved, no Allow any "global stablecoin" to operate within the EU.

European Union authorities point out that the Board and the Executive Committee recognize that "stable currency may be useful in providing cheap and fast payments", but at the same time it may also bring more risks and challenges. It is understood that this statement has been approved by the European Council's Economic and Financial Affairs Committee (ECOFIN) on December 5.

So far, it is unclear whether this new statement will further affect any action or form any legally binding basis. As of the deadline, representatives of the EU Council did not respond to requests for comment in a timely manner.

Stablecoin is a digital currency that is linked to the price of other assets, thereby avoiding the usual price volatility of cryptocurrencies. The EU authorities listed many risks and problems with the adoption of stablecoins in the statement, and if adopted on a global scale, stablecoins will eventually threaten currency sovereignty. The statement states that

These arrangements pose many challenges and risks, such as those related to consumer protection, privacy, taxation, money laundering, terrorist financing, market integrity, governance, and legal certainty … These concerns may be amplified and may affect monetary sovereignty , Monetary policy, the security and effectiveness of payment systems, financial stability, and fair competition pose new potential risks.

Because of this, EU authorities have pointed out that to address the challenges posed by global stablecoins requires concerted action by countries around the world. In addition, the statement also stated that various institutional entities that plan to issue stablecoins within the EU must urgently provide "comprehensive and appropriate information to facilitate a nuclear test assessment of the applicability of existing regulations."

The EU Council and the Executive Committee concluded that "no global stablecoin program can operate in the EU until legal, regulatory and supervisory challenges and risks are fully identified and resolved."

Although the EU authorities pointed out many risks related to stablecoins, they also welcomed the central bank's commitment to assess the costs and benefits of the central bank's digital currency (CBDC) and to provide fast and affordable cross-border payments.

Youyou Finance reported yesterday that the French central bank plans to test a central bank digital currency for financial institutions in 2020 and will test the digital euro before the end of the first quarter of next year.

Disclaimer: This article is compiled by Youyou Finance. The content of the article represents the author's personal opinion and does not constitute investment advice. If reproduced, please indicate source.