Spooked by Libra, EU pledges to regulate digital currencies

BRUSSELS: The European Union’s finance commissioner pledged on Tuesday to propose new rules to regulate virtual currencies, in a reaction to Facebook’s plans to introduce Libra, which the EU considers a risk to financial stability.

France and Germany have said that Libra, whose size would dwarf cryptocurrencies such as bitcoin, could limit their monetary sovereignty.

“Europe needs a common approach on crypto-assets such as Libra,” Valdis Dombrovskis told EU lawmakers in a confirmation hearing. “I intend to propose new legislation on this.”

The EU has no specific regulations on cryptocurrencies, which, until Libra was announced in June, had been considered a marginal issue by most decision-makers because only a fraction of bitcoins or other digital coins are converted into euros.