BRUSSELS (Reuters) – The European Central Bank would have to consider the issuing of a public digital currency, there is an EU draft document said, ” after the plan of Facebook to have a private meeting with a hostile reaction from the global regulators.
FILE PHOTO: a Small toy figures in the painting are to be seen in the representations of the virtual currency, to display the European flag and on the Facebook Scale the logo in this illustration picture, the 20th October 2019 at the latest. REUTERS/dado Ruvic/File Photo
The social media company said in June that it was planning to launch its digital Scales and currency in the next year. However, France and Germany, it said in September it posed risks for the financial sector, and to support the development of a public alternative.
The design of the European Union, the text, seen by Reuters on Tuesday, also calls for the bloc to develop a common approach to cryptocurrencies, including a possible ban on such projects as high-risk.
In its current form, the document that would be adopted by the EU finance ministers next month, it would quickly escalate to an EU regulation, the campaign against the cryptocurrencies, of which up to now have been only partially regulated in some member states of the eu.
“The ECB and the central banks of the EU, it would be helpful if the exploration of the opportunities and challenges of the issue of the central bank of digital currency, including the consideration of concrete steps to this effect,” said the draft, drawn up by the Finnish presidency of the council, and are subject to change.
Digital currencies, such as the monitor, also known as the stablecoins are usually supported by a traditional, the money and other valuables, while the crypto-currencies such as bitcoin are not. Both are cryptocurrencies.
The draft text will be discussed by EU finance ministers on Friday, according to the agenda for the meeting, with a view to adoption at its next meeting, on Dec. 5.
“STEPPED UP” THE PROCESS OF THINKING
ECB board member Benoit Coeure said in September that the bank needs to “step it up” in his mind in a public, digital currency.
An ECB official said that, in the most ambitious version of the project was to be able to consumers making use of e-money would be directly deposited with the ECB, without the need for the bank to have the accounts of the financial intermediary or the counterparty.
All of them are now required for the processing of digital payment, but it is no longer if the ECB took up their positions, and the cutting of transaction costs incurred. But this gives rise to the technical challenges and the opposition of the banks is very great.
Until Facebook launched its project in June, the regulators have largely ignored the stablecoins, due to their small size. The largest of these, the Necklace is much smaller than that of bitcoin.
However, the Scale has the potential to be an enormous reach, it can be used by the billions of Facebook users are afraid of the regulators.
As a part of a global struggle against the Scale, and the G7 group of rich nations, said last month that the stablecoins should not be allowed to start until the global risk, that they have made have been dealt with.
Under the pressure of the regulations, the Scales have lost a quarter of its original members, including payments companies, Visa and Mastercard credit cards.
In the EU, the document reaffirmed the G7’s concern about the risk that currencies in the pose, with an indication of the purpose of money laundering, consumer protection, and the functioning of payment systems, taxes and cyber security.
But, at the recommendation of a total ban on high-risk projects, and is a step towards the creation of a public digital currency is going to continue.
“At the very least, we need a robust regulatory framework in order to deal with” virtual currencies,” said Markus Ferber, a German conservative, who is leading on financial business as the largest european Parliament group.
“The executive of the EU Commission, has already received a lot of … complacent in its up to date. With the threat of the Scales to the horizon, now is the time for action is now.”
Reporting by Francesco Guarascio @fraguarascio; editing by John Stonestreet