The EU has taken a firm stance on stablecoins. But a senior government official in Lithuania says the move will not stop stablecoin operators from proceeding with their plans as the EU is not against innovations and simplified payments.
Today, the Council and the Commission adopted a joint statement, warning that no global stablecoin project should receive the green light in the EU “until the legal, regulatory and oversight challenges and risks have been adequately identified and addressed.”
Darius Trakelis, Director of the EU and International Affairs Department at the Lithuanian Ministry of Finance, speaking to Cryptonews.com ahead of the ECOFIN meeting, denied that the statement was solely targeted at Facebook's Libra.
“It is not only about Facebook. In fact, you will not find any mention of Facebook in the document. The Facebook initiative sparked the discussion. But the EU’s position is horizontal; it would apply the same to any other [stablecoin] initiatives.”
According go the director, the commission hopes to establish its position on stablecoins in advance of any release.
This, says Trakelis, will help companies understand how the regulatory land lies in the EU before they launch token-powered projects.
“The joint statement does not mean that EU is against innovations or simplified payments. The EU wants to [protect consumers] users and ensure the financial stability of EU countries.”
The EU has a number of concerns about Facebook’s Libra plans. The European Commission says it has sent a questionnaire to the social media platform asking for more details on Libra – but is yet to receive answers.
“At the moment we don’t have information about what [Libra] will look like. There have been attempts to obtain more information and prepare for any risks that could arise. That’s why the statement was issued – indicating that before the launch of any of these operations, all the relevant regulatory and legal risks should be identified,” he explained.
Other main points from the joint statement:
- Stablecoins may present opportunities in terms of cheap and fast payments;
- Stablecoins pose multifaceted challenges and risks (consumer protection, taxation, monetary sovereignty etc.);
- Stablecoins should not undermine existing financial and monetary order as well as monetary sovereignty in the EU;
- There is a need to ensure legal clarity about the status of stablecoin arrangements and entities that intend to issue stablecoins, or carry out other activities involving stablecoins in the EU should provide full and adequate information urgently;
- Tackling the challenges raised by "global stablecoins" requires a coordinated global response;
- The emergence of stablecoins highlight the importance of continuous improvements to payment arrangements.