EU Needs a Common Approach to Crypto-Assets: EU Financial Commissioner

The European Union may soon develop a regulatory framework for cryptocurrencies.

At a confirmation hearing for his reappointment, Valdis Dombrovkis, the European Union’s financial commissioner, said that he intended to propose new legislation for cryptocurrencies. “Europe needs a common approach on crypto-assets such as Libra,” he said.

Dombrovkis, who is the former Prime Minister of Latvia, made those remarks while discussing the use of financial technology in the EU. He said fintech brings “huge potential” by providing better and faster access to finance for consumers. “I will put forward a new strategy for Europe to get the best out of FinTech and compete globally,” he said.

A common legislation for cryptocurrencies is lacking among EU member states. Mostly, it is a patchwork of differing approaches. For example, Estonia is regarded as one of the most crypto-friendly jurisdictions in the region and has adopted a licensing system to regulate crypto businesses. On the other hand, the UK’s Financial Conduct Authority (FCA) recently floated a proposal to ban crypto derivatives. The CME and Nasdaq joined a consortium of other exchanges in pleading with the authority to not ban crypto derivatives.

EU governments have also been quick to criticize Libra, Facebook’s cryptocurrency and blockchain. The French finance minister has threatened to ban development of Libra and Germany’s recent blockchain legislation also prohibits the development of coins that compete with national currencies.

Meanwhile, the Financial Times reported yesterday that the European Commission has sent a questionnaire to Facebook’s partners in the Libra Association asking them details about its reserves and risks.