The European Union (EU) is currently unable to decide what to do with Libra; the digital currency which Facebook is expected to issue this year.
For his part, Valdis Dombrovskis, Executive Vice-President of the European Commission, said in a memo that the Libra Association has failed to answer the questions provided by the EU.
“However, the available information on Libra and the Libra ecosystem lacks detail. Therefore, the Commission sent to the Libra Association a set of questions to get further details on the project.”
“However, as Libra is still a project, and thereby a moving target, the information provided remains insufficient for determining the precise nature of Libra and, by extension, its relation with existing EU law,” he added.
Regulatory controversy against cryptocurrencies in the US
On 13 October, Mark Zuckerberg, Facebook CEO, spoke before the US House of Representatives Subcommittee on Financial Services.
However, policymakers have expressed their concerns, citing Zuckerberg’s vague responses on the digital currency:
“I actually don’t know if Libra is going to work.”
Therefore, Dombrovskis referred to a joint statement from the Council and the Commission, saying:
“The risks raised by “stablecoin” arrangements should be subject to clear and proportionate regulatory and oversight framework.” “In addition, they are also committed to put in place a framework that will harness the potential opportunities that crypto-assets may offer.”
Earlier, Cryptolydian reported Switzerland’s President Ueli Maurer as saying that Facebook’s cryptocurrency Libra has failed in its current form. Thus, it should be amended before sending it for regulatory approval.
“I think Libra does not have a chance in its current form as the central banks will not accept the basket of currencies supporting it,” said Maurer.
However, Ayman Al-Banna, senior advisor at MAG Consulting said Libra has failed in regulations but the cryptocurrency is technically going well, especially after having passed tests.
“This will open the door of surprises widely before the cryptocurrency,” Al-Banna said.