Recently, governments of the five European Union (EU) countries all backed the European Commission’s intent to draft regulation for asset-backed crypto assets, notably stablecoins. Germany, France, Spain, Italy, and the Netherlands supported this decision.
In their draft joint statement, the governments reportedly pledged to prevent global stablecoins from operating in the EU. Governments of the countries mentioned above want the EU to address all legal, regulatory, as well as oversight matters. After this, they will be ready to grant permission. Importantly, the European Commission is expected to unveil its proposals for regulating crypto assets later this month.
Governments and tech companies
As stated above, governments of several countries would like to regulate crypto assets. However, they are not alone as the governor of the Bank of France, Francois Villeroy de Galhau also wants to address crypto-related issues.
Last week, he attended the Bundesbank conference. According to Villeroy de Galhau, Europe can’t afford to lose momentum when it comes to dealing with the challenges posed by the private sector global digital assets.
Notably, the biggest risk is that big tech companies will use their global market penetration. Consequently, they will be able to build private financial infrastructures as well as monetary systems.
Furthermore, big tech companies will compete with public monetary sovereignty. They will position themselves as issuers and managers of a universal currency.
Villeroy de Galhau said the articulation of private multiple central bank digital currencies (CBDC) with private sector initiatives would undermine input from other central banks. According to him, the European Central Bank and the Eurosystem can’t allow itself to lag behind on a CBDC.
It is worth noting that, a European CBDC could consist of both retail and the wholesale versions for financial institutions. Furthermore, he also mentioned that there is no contradiction between considering a euro-CBDC and supporting European Payments Initiative.