European Union Is Preparing To Regulate For Cryptocurrencies
When we compare 2020 compared to other years, we can see that more countries have opened their doors to cryptocurrencies. While the demand for cryptocurrencies has increased, regulatory policies for cryptocurrencies have also begun to be established in many countries in Asia and Africa.
In the European Union, a political and economic structure consisting of 27 member states, a new draft law has been introduced for the regulation of cryptocurrencies. The leaked 167-page draft includes regulatory guidelines, policies to examine the volatility of the market for stablecoins , Bitcoin (BTC) and other cryptocurrencies.
With the enactment of the draft, European Union member states will be able to adopt cryptocurrencies more easily in the future.
Bitcoin and Libra Draft Primary Crypto Coins
According to Euractiv, a traditional European media outlet, the European Commission’s cryptocurrency law proposal will cover many different cryptocurrencies, including “systematic” and “popular” digital currencies.
Facebook’s crypto currency Libra is described by the European Union as a high-risk stablecoin. Secondly, one of the main items of the draft is that Bitcoin must be subject to regulatory policies.
Member states such as Germany, France and Malta are currently working on a bill to prevent frequent manipulations in the cryptocurrency market.
Ice Between Libra and European Union Will Not Melt Easily
The EU’s plan to regulate digital currencies first broke out in June after Valdis Dombrovskis, Vice President of Financial Services, stated that he would guide the European Union’s cryptocurrency regulations.
Earlier, the finance ministers of the European Union member states collectively stated that they will not be welcome in Europe until the risk factors of private currencies such as Libra are fully analyzed.
After Libra was announced by Facebook, which served 2.7 billion users in 2019, the European Union opposed such cryptocurrencies on the grounds that the weather created by stablecoins posed a threat to their sovereignty. However, as in many countries, it will not be able to prevent the growing cryptocurrency market in the European Union and will go through some regulations.
Shortly after the statements made by the European Union Central Bank, which opposed Libra and stated that it is open to manipulation, it announced that it started working for its own digital currency. Despite the mandatory relationship between the EU and Libra, the inclusion of Libra in the regulatory bid also provided hope for the controversial stablecoin.