The European Financial services commissioner Valdis Dombrovskis said that the lack of legal certainty is often cited as the main barrier to developing a sound crypto-asset market in the EU. According to local news reports, to address this regulatory gap, the European Commission will put forward legislation in early autumn to try to balance the need of rules to protect customers without hampering the innovation of a developing sector. Cryptocurrencies like Libra will have to comply with the regulations to operate in the continent.
“The commission will create a regulatory sandbox for experimentation.”
Financial services commissioner Dombrovskis said that the Commission will create a ‘sandbox’, a pilot framework with some regulatory flexibility for experimentation “but well-framed and under close supervisory oversight.” The European Commission will create a specific regime and a passport system for crypto-assets markets that are currently not covered by the EU law. Dombrovskis warned that under the new regulations cryptocurrencies such as Libra would be heavily monitored as they raise challenges in terms of financial stability and monetary policy. Currently, European countries are adopting FATF guidelines regarding crypto regulations.
Libra makes several changes to gain regulatory approval.
Libra Association has made several changes to its white paper to get regulators on board. Facebook has also distanced a bit from the project as it claims it is only the part of the association and does not make all the decisions. The social media giant had revealed the crypto project last year and had said that it would launch the stablecoin by the end of this year. The company still maintains the stance of launching the crypto project before the end of this year. Libra has faced regulatory scrutiny from the regulators around the world. Now the organization has made some changes to its white paper to appease the regulators and go ahead with its crypto project. The social media giant also spent millions of dollars lobbying for Libra.