Reuter reports that the launch of Libra has driven the European Union’s finance commissioner to consider new rules to regulate virtual currencies. Earlier, Facebook’s Libra had been considered a risk to financial stability, according to EU officials. Facebook’s planned Libra will soon be the world’s best-known Cryptocurrency, backed by conventional money deposits, short-term government securities or gold. The power derives from Facebook’s European users that run into millions would likely pose a threat to other payment modes.
Germany and France said that Libra’s power would dwarf cryptocurrencies such as bitcoin, and eventually limit their monetary sovereignty.
At this point, the EU has no specific regulations on cryptocurrencies. It was never considered a serious issue until now because very few digital coins are converted into euros. But now, with the launch of Libra, the threat of bigger value conversions has become real. With the much bigger impact that Libra could have on the money markets, the EU fears or its financial stability after the launch. The result is that the EU is now also pushing the G20 for global action on “stablecoins,” reports say.