Facebook Libra plans are difficult: the EU will introduce new regulations

The plan for the US social media Facebook company to issue the digital currency "Libra" in 2020 is difficult. The EU will introduce legislation to prevent Libra from destroying the European single currency and being used as a money laundering tool.

The new latitude and longitude client on October 9th, the US social media Facebook company (Facebook) plans to issue digital currency "Libra" (Libra) in 2020, the EU will introduce legislation to prevent Libra from destroying the European single currency and Used as a money laundering tool.

According to the Wall Street Journal Chinese website, the EU will propose legislation to prevent Facebook's proposed digital currency, Libra, from destroying European single currency and being used as a money laundering tool. This is one of Libra's most stringent regulatory measures to date.

According to reports, East Bromskis, who will continue to serve as vice chairman of the European Commission for financial regulation, said on Tuesday that Libra poses a systemic risk to the euro, given the size of the company that supports the cryptocurrency-based global payment network.

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East Bromsky said to EU legislators, "Yes, we need to supervise Libra and monitor it at the EU level, both from the perspective of financial stability and from the perspective of protecting financial investors."

On June 18 this year, Facebook announced the issuance of cryptocurrency Libra, sparking market debates about its reliability, volatility and data security, and the troubles of skeptical regulators from around the world.

On the afternoon of July 2nd, US time, the US House of Representatives Financial Services Committee sent a letter to Facebook executives such as Zuckerberg asking them to immediately stop all work on the digital currency project Libra and the digital wallet Calibra.

According to Singapore’s Lianhe Zaobao, on July 16, Democrats, who are majority in the US House Financial Services Committee, proposed a draft legislation recommending prohibiting large technology companies from providing financial services or issuing digital currencies. The proposal, which has begun to be circulated, suggests that if a technology giant illegally provides financial services or issues digital currency, it will be fined $1 million a day.

On September 2, ECB Executive Committee member Yves Mersch pointed out at a meeting of the European Central Bank system that Libra may weaken the ECB’s control over the euro, affecting the liquidity of banks in the euro zone, and thus jeopardizing the transmission mechanism of monetary policy. It may also erode the international status of the euro.

On September 13, the German and French Finance Ministers issued a joint statement in Helsinki, Finland, reaffirming the importance of monetary sovereignty and opposing Libra's implementation of the digital currency in Europe.

On September 16th, Switzerland, the Libra team met with officials of the 26 central banks in Basel, Switzerland, including central banks such as the Federal Reserve and the Bank of England, to discuss the policy and regulatory issues brought about by the stable currency supported by financial institutions and technology companies. At this meeting, ECB Council Executive Benoit Coeure bluntly stated that as a new technology in the global payment system, Librae has not been tested, and Libra has also brought serious problems to some public policies. Risk, the threshold for regulatory approval will certainly be high.

Cao Heping, a professor at the School of Economics at Peking University and vice president of the Digital China Research Institute at Peking University, said in an interview with Zhongxin Jingwei client that Libra’s risks and opportunities coexist and that its advantages and disadvantages should be fully considered. "Digital currency can create huge profits. For the development of the global economy, Libra's emergence has stimulated the central bank's extensive attention to digital currency, and forced the introduction of digital sovereign currency-related policies to promote the development of relevant regulatory measures in various countries."

Sheng Songcheng, former director of the Survey and Statistics Department of the People's Bank of China, pointed out that Libra may cause four major problems: First, Libra will affect the currency sovereignty of non-reserve currency countries, especially in developing countries. Second, Libra lacks transparent and stable operation. Mechanisms, which in turn threaten financial stability; third, Libra will weaken the effectiveness of monetary policy and disrupt the economic adjustment cycle; fourth, Libra has increased the difficulty of financial regulation.

Article from: Zhongxin Jingwei APP

Editor: Wang Yongle

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