Blockchain, the technology that underpins cryptocurrencies, is an emerging technology and that policymakers need to recognise and yet must carefully consider how its applications fit into their financial system policies.
We are witnessing an era of a critical advancement in fintech: The European Central Bank (ECB) plans for the development of a rival to Facebook’s libra and bitcoin. In short, they are planning a public digital currency that could render Facebook’s libra dead.
Just Not Yet
However, the most serious new threat to bitcoin and cryptocurrency yet, is from Danish politician Margrethe Vestager. She recently appointed the European Commission’s executive vice president for digital, as well as retaining her role as the E.U.’s competition commissioner.
Margrethe Vestager, who has made a name for herself as the E.U.’s competition commissioner, was this week handed vast new powers as the European Commission’s executive vice president for digital.
France and Germany said they could block Facebook’s libra in Europe due to the risks it poses to the financial sector while backing the ECB’s proposed development of an alternative public cryptocurrency.
“France and Germany consider that the libra project, as set out in Facebook’s blueprint, fails to convince that those risks will be properly addressed,” France’s Finance Minister Bruno Le Maire and his German counterpart, Olaf Scholz, said in a joint statement issued at a meeting of eurozone finance ministers in Helsinki, it was first reported by Reuters.
In June, social media giant Facebook revealed plans for its libra digital currency, something it wants to serve as a global currency, putting it in direct competition with U.S. dollar and provoking the ire of U.S. president Donald Trump. Facebook has promoted Libra as an opportunity to provide low-cost online commerce and financial services to more than a billion “unbanked” people. Facebook is expected to be navigating into financial services offerings and would allow more small businesses to buy ads on the social network.
Here’s the thing, officials and crypto community would be very concerned about how the currency would be regulated, and in particular how it would comply with regulations designed to prevent money laundering and the financing of terrorism.
Vestager has been put in charge of revamping how the E.U. regulates the digital world, and has unparalleled control over its bitcoin and crypto policy; with the expectation that the likes of similar development of Facebook with its cryptocurrency and other ambitious technology companies that could surface with similar ambition to disrupt the finance industry.