The European Union and major central banks in Europe are introducing laws and regulations on crypto currencies that will allow Facebook to launch its digital Libra currency.
The Bank of England has finalized a set of principles the Facebook-led Libra cryptocurrency project must adopt before going live in the UK.
The document, which addresses the resilience of the U.K. financial system in general, discusses innovative developments in the payments sector, noting that Libra has the potential to become “a systemically important payment system”.
“The FPC judges (Financial Policy Committee) that such a system would need to meet the highest standards of resilience and be subject to appropriate supervisory oversight,” the committee says in the policy summary.
Significantly, the BoE says it needs access to be able to monitor payment chain information as one of its conditions.
Recently, French and German finance ministers also expressed skepticism regarding Libra, arguing that the project should not be authorized on European soil as it would imperil the countries’ monetary sovereignty.
EU gives the “go ahead”
Similar standards for Libra’s launch were discussed by the EU Commission’s finance minister nominee earlier this week. In his hearing, minister Olaf Scholz said the EU would create a regulatory framework for the payment network under his tenure.
“A core element of state sovereignty is the publication of a currency, we will not leave it to private companies,” Scholz reportedly told German news outlet Wirtschafts Woche.
EU’s Finance Commissioner Valdis Dombrovskis also vowed to regulate digital currencies like Facebook’s Libra, should he be re-elected.
“Europe needs a common approach on crypto-assets such as Libra,” Dombrovskis told Union members at a confirmation hearing, according to Reuters. “I intend to propose new legislation on this.”
Even as Libra threatens to unravel, with founding partner PayPal skipping key meetings and other key backers reconsidering their involvement, lawmakers are coming out in favor of the underlying idea of a national digital currency, distinct from cash. Bipartisan lawmakers French Hill and Bill Foster put it to the Federal Reserve last week, and German’s Scholz appeared to condone it yesterday.