The document published by the European Union is a draft that will seek to establish a regulatory framework for cryptocurrencies in the continent
The European Union (EU) believes that issuing digital currencies by financial institutions in European countries could be of great benefit for the region. In this way, a document written directly by the Presidency of the agency expresses that it is convenient for the central banks of each country to develop their digital currencies as a local and regional financial mechanism.
In addition to this, the agency proposes the creation of a regulatory framework that turns around the use and issuance of these assets to support their development and livelihood, as well as to inspect private companies that create cryptographic projects of different kinds.
The document was published on November 6th through the official website of the Council of the European Union. This document indicates that the European Central Bank (ECB) and other Central Banks should manage, together with the competent legal bodies, a drastic change in digital payment systems to adapt them to the new times.
An example of financial transformation is cited, using digital currencies anchored to other assets and stablecoins; thus, showing the wide possibilities and diversification of markets.
The draft, expressed in this document, emerges in response to the launch of Libra, the cryptocurrency announced by the social media giant, Facebook, in the middle of this year.
This document or initial draft for the legal framework that would regulate the issuance and use of cryptocurrencies by the Central Banks of the EU member countries, would, in the first instance, be subject to discussions for approval by deputies of the multinational body. Besides, it could present various changes and amendments before its implementation on the continent.
The text enthusiastically exposes the agency’s support for this new financial initiative. “We welcome that central banks, in cooperation with other relevant authorities, continue to assess the costs and benefits of central bank digital currencies as well as engage with European payment actors regarding the role of the private sector in meeting expectations for efficient, fast and inexpensive cross-border payments”.
It does not seem to be a coincidence that these types of initiatives to crypto issues arise from the EU, as this body was born as a support to the Central Banks of the region to avoid future problems with the parallel development of these technologies by private entities.
Despite this, there is a governmental interest on the part of some nations. An example of this emerged recently when the Association of German Banks said it intended to issue a Digital Euro to facilitate payments and transactions. However, they said they need the support of institutional entities to conduct it.
This initiative is expected to bring benefits to the crypto industry, although limits would certainly be set on companies that develop digital assets. However, the initiative suggests a possible birth of stablecoins issued by the central banks of European countries.
By María Rodríguez