Ramla SoniEU regulators are looking more intensely into the risks posed by Facebook’s proposed cryptocurrency Libra, according to Reuters.
The Economic and Financial Committee (EFC), has requested an analysis note from the European Commission, which will be sent to European capitals this week. The next EFC meeting will take place on Friday September 5th, when the issue will be discussed by the envoys of national governments.
European Competition Commissioner Margrethe Vestager said scrutiny of Libra was justified. The new digital coin, backed by four official currencies and immediately available to Facebook’s 2 billion users around the world, has yet to be launched.
The digital asset could be regulated under MiFID II, the anti-money laundering directive, alternatively it could fall under a dedicated regime adjusted to its own features.
For its backers, such as MasterCard or Uber, Libra addresses the volatility of digital currencies by anchoring the “coin” to a basket of sovereign currencies. Critics of this position would argue that the sovereign currencies themselves are not anchored to anything fungible and are also vulnerable.
According to an EU document seen by Reuters, Ms Vestager sent questionnaires to the 28 members of the Libra Association, which is set up to govern the new currency, asking for further information on the conditions for membership.
The document asked how Libra-backed products and services will be integrated into Facebook’s platforms: WhatsApp, Messenger, Instagram and Calibra; how the consumer data would be used and who would own it.
