Benoit Coeure, a member of the executive board of the European Central Bank said regulators must be swift in preparing for Libra. He stated this on July 7. The official added that it was irresponsible of regulators to allow the creation of new financial services and asset classes.
Coeure made these remarks in Aix-en-Provence in Southern France noting that,
It’s out of the question to allow them to develop in a regulatory void for their financial service activities, because it’s just too dangerous,
Referring to financial authorities, he further cited that,
We have to move more quickly than we’ve been able to do up until now.
Current Financial Laws Are Deficient
Per Coeure, the creation of crypto coin has unveiled gaps in the existing financial regulations. On top of this, he believes the development of the crypto space underscores the slow adoption of new technologies by banks.
All these projects are a rather useful wake-up call for regulators and public authorities, as they encourage us to raise a number of questions and might make us improve the way we do things.
Prior to Coeure airing his concerns, UK regulators joined hands in preparation of tackling the issues Libra would bring. Reportedly, the FCA, the Bank of England, and the UK Treasury teamed up because Libra touches all the three agencies.
Speaking about Libra Andrew Bailey, the CEO of FCA noted,
It has the potential to be extremely significant. It does raise big issues for the public policy world.
ECB Takes a Careful Approach Toward Crypto
Earlier this year, Ardo Hansson, a member of ECB’s governing body, and the governor of Estonia’s central bank predicted that crypto will end up as a “complete load of nonsense”.
I think we will come back a few years from now and say how could we ever have gotten into this situation where we believed this kind of a fairy-tale story.
Despite Hansson’s negative outlook, ECB decided to tread with caution when it comes to the crypto sector. A publication notes that the entity discussed the possible benefits and downsides of introducing CBDCs.
This news comes after Jeremy Allaire, the CEO of Circle took time for an interview to air his sentiments regarding Libra. In the interview, he said that he hopes Libra would spur the creation of national policies that would govern the crypto space.
Also, the US House of Representatives Committee on Financial Services asked Facebook and its partners to halt the development of Libra. According to the committee, further development of Libra could cause serious problems to the global economy.
Do you think Libra will Push for the creation of clear rules that govern the crypto sector? Let us know in the comments below.