European finance ministers agreed on Thursday that private digital currencies such as Facebook's libra will not be introduced in the European Union (EU) for the time being. The risks associated with these currencies must first be clearly identified and addressed.
Ministers see EU rules to regulate crypto coins as a possible next step. The European Commission is already working on such a plan, said Vice-President Valdis Dombrovskis.
The European Central Bank (ECB) is also investigating whether it is necessary to develop its own public digital currency. This would be the case in particular if the number of cash payments continued to decrease sharply. The consequences of such a move should first be properly investigated, according to the central bank.
The ministers' verdict concerns so-called 'stablecoins', of which libra is a well-known example. The difference between this type and crypto coins such as bitcoin is that stablecoins are traditional currencies, while the value of coins as bitcoin is determined by the market. Both types do fall into the umbrella category of crypto currency.
France blocks introduction to the EU
Supervisors around the world have been critical of libra since the announcement of Facebook's plans last June, and in particular the potential negative impact of the crypto currency on the existing financial system. France stated in September that it would therefore prevent the introduction of libra in Europe. The currency is also critical in the United States and China, among others.
A quarter of the companies that first supported the Facebook currency in the so-called Libra Association have dropped out. Credit card companies Mastercard and Visa, for example, chose to leave last October. However, Facebook still aims to introduce the currency in June 2020.