European Central Banks Demand Strict Rules on Cryptocurrencies

Ministers of Finance in Germany, France, Italy, Spain, and the Netherlands, asked the European Commission for strict rules when presenting its cryptocurrency proposal.

After seven months of videoconferences, the EU finance ministers met this Friday. The meeting took place in Berlin for the first time after the coronavirus outbreak. Moreover, the meeting will continue this Saturday. However, expectations of a decision remain low. Some assume the commission to issue stringent and very clear rules.

Moreover, the draft cryptocurrency proposal includes stricter requirements for digital currencies that supposedly have more risks, especially stablecoins. 

EU to Create a Body to Supervise Digital Currencies

In the coming weeks, the European Union could take the first step towards becoming the first primary jurisdiction to regulate cryptocurrencies.

There is a 167-page draft of the European Commission proposal, which includes an important novelty. The EU will establish a new college of supervisors, with national and European authorities, to supervise significant digital currencies. 

The regulation would put Europe at the forefront of the digital environment’s control and supervision, as has already happened with data privacy. Valdis Dombrovskis, Executive Vice President of the Commission, had mentioned in June that Europe was able to lead the way on regulation.

On the other hand, the authorities are especially concerned about stablecoins. Being linked to national currencies, these ‘stablecoins’ seek to avoid the Bitcoin stock market maelstrom and other very volatile projects. But regulators fear that they could destabilize the global economy. Especially if they can potentially reach 2.7 billion users worldwide, as is the case with the Facebook initiative. 

European Stability

The new rules’ objective is to provide legal certainty, support innovation, protect consumers and investors, and guarantee financial stability and market integrity in the EU. 

Germany, France, and Malta have already designed national legislation in this field, remaining under community standards.