The finance ministers of the five EU countries called for the formulation of stablecoin-related rules, and the Libra project may encounter obstacles again

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The finance ministers of the five EU countries called on the European Commission to develop strict regulations for stablecoins;

Image source: pixabay

Treasurers said regulation was needed to maintain financial market stability;

The proposed rules could affect the launch of Facebook's Libra project.

According to a Decrypt report on September 12, the finance ministers of Germany, France, Italy, Spain and the Netherlands have recently called on the European Commission (European Commission) to formulate strict rules related to stablecoins (digital assets backed by fiat assets with low price volatility) , and specifically named Facebook's Libra project.

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Image source: pixabay

Stablecoins should not operate in the European Union (EU) until the European Union (EU) has clear rules, the finance ministers of the five countries said in a joint statement, Reuters reported. This could hinder the launch of Facebook's Libra project, which is based in non-EU member Switzerland.

Specifically, the finance ministers of the five countries want all stablecoins operating in the EU to be pegged 1:1 to the EU’s legal tender (the euro or other national currencies issued by EU countries). Additionally, the assets backing the stablecoin need to be stored in EU-approved financial institutions.

The five finance ministers warned that the rules should be put in place to "maintain financial market stability", protect consumers and safeguard the EU's financial sovereignty. French Finance Minister Bruno Le Maire added that they were waiting for "very strict and very clear" rules to avoid the misuse of cryptocurrencies for illegal activities such as money laundering.

These rules theoretically apply to all stablecoins, but Le Maire made it clear that he is particularly concerned about the yet-to-be-launched Libra stablecoin. Lemaire said:

“Central banks, and I mean the European Central Bank, are the only banks allowed to issue stablecoins. This cannot be undermined or weakened by any project, including the so-called Libra project.”