The EU proposes its currency to counter the Facebook Libra

At the end of August, a European Antitrust document appeared in which Libra was put under scrutiny especially regarding the potential anti-competitive behavior of cryptocurrency. The fear is that, being able to reach a potential of 2.4 billion Facebook users, Libra can cannibalize the payment services market. Furthermore, the consortium of 29 companies that had formed around the cryptocurrency threw more shadows on its launch, given that among them there were also Visa, Mastercard and PayPal.

Looking at the clouds that were already gathering on his future, Paypal was the first to break away from Libra, followed immediately by eBay, Visa and Mastercard. The consortium therefore lost important pieces along the way.

Now this European draft is coming up, urging the Union to develop a common approach to cryptocurrencies, including the possible prohibition of projects deemed too risky.

However, Libra will be a stablecoin, or type of digital currency linked to stable assets. The stablecoins are usually supported by traditional currency and other securities, while encrypted coins such as bitcoins are not. But both are cryptographic currencies.

Does Europe want to coin its cryptomonet?

In its current form, the document drafted by the Finnish EU presidency would intensify an EU cryptocurrency regulatory campaign, which so far have only been partly regulated in some EU Member States.

In the project it is also possible to read an interesting corollary: "The ECB and other EU central banks could usefully explore the opportunities and challenges of digital currency issuance by central banks, even taking into consideration concrete measures to this end."

In extreme evils, Europe could also consider issuing a public cryptocurrency regulated by the Union. An ECB official stated that, in its most ambitious version, the project could allow consumers to use electronic cash, which will be deposited directly with the ECB, without the need for bank accounts, financial intermediaries or clearing counterparties.

Obviously, the latter, far outside the cryptocurrency sector as such, would be a step that would undermine the banking system as we know it and is a scenario that is difficult to apply at least in a short time.