The finance commissioner of the European Union, Valdis Dombrovskis, recently informed Europe’s governing body about his plans to formulate laws to control regulation of the cryptocurrencies, according to a recent report.
Dombrovskis told EU legislators assembled at his confirmation hearing Tuesday,
“Europe needs a common approach to crypto-assets such as Libra…I intend to propose new legislation on this.”
Through his five-year course, Dombrovskis served as a European commissioner in financial stability and controlled virtual currencies. He altered his attitude after Facebook declared its strategies for Libra, the cryptocurrency that might have systemic impacts on financial strength, he informed lawmakers.
The news exemplifies a sudden transition for Dombrovskis, who, in his earlier term as the finance commissioner, was known to have “resisted” enforcing laws to regulate virtual currencies like Bitcoin founded on the belief that its effect would be fairly trivial.
But Dombrovskis spoke that the inception of Libra, the proposed global cryptocurrency system by Facebook, “could have systemic effects on financial stability.”
Since Libra has an enormous scale potential, it might have a rapid implementation of any new roll-out within 2.4 billion Facebook users; therefore, some rules need to be explicitly laid down, said Dombrovskis.
Although any timetable isn’t yet set for the overture of the constitution, Dombrovskis vowed that new ordinances would be composed to aid financial vitality, safeguard users and cater to the hazards in money-laundering through cryptocurrencies as well as tokens.
Cryptocurrencies have also given rise to some unprecedented risks in international and illegal money transfer due to the fact that cryptocurrencies can easily escape the books as well as the eyes of the law.
Dombrovskis, in a statement, said that he discerns “a lot of merits” around the notions of the pan-European government of supervisions for cryptocurrencies.
During the same time, he even pledged to establish an endurable plan for European investment to stimulate a trillion euros of public and private green investment capital to commence streaming in the following decade.
“We need to assess further under what circumstances cryptocurrencies and related services are covered by existing regulation. This depends very much on the facts and circumstances around specific crypto-tokens, based on the assessment of risks and opportunities and the suitability of the existing regulatory framework for these instruments, the Commission will determine if regulatory action at the EU level is required.”
Assurances in the budget of the EU, as well as through the European Investment Bank, will be supporting the fund, though a major chunk of the wealth will be channeled through the private sector, Dombrovskis said.
The EU is to notify G20 backers during a meeting of banking executives and finance officials in Washington that, According to a news report,
“Latest developments with regard to stablecoins and the multi-faceted regulatory, oversight and supervisory challenges these represent, call for seamless cooperation and concerted response at global level.”