The European Central Bank (ECB) has urged all commercial banks within its territory to come up with their own transfer systems as opposed to relying on the Facebook-allied stablecoin Libra. This is according to Jens Weidmann, ECB’s member of the Governing Council and President of Bundesbank.
Avoid Relying on Libra, EU Commercial Banks Told
The ECB official stated that commercial banks in the Euro jurisdiction should devise tools cheaper and faster transfers. Besides, the banks should be vigilant about relying on Libra and other privately owned crypto technologies. Weidmann also dissociated himself with the position of ECB President Christine Lagarde, saying he did not expect the bank to launch its own digital asset.
During a Handelsblatt interview on January 2, Weidmann stated that all currencies and transfer methods should remain open to regulation and audit to avoid money laundering.
“I’m not in favor of always immediately calling on the state to come up with solutions. In a market economy, it’s up to companies to develop products that meet customer needs.”
He added that he wasn’t against the discovery of digital assets, but he was concerned about the rush without analyzing the consequences.
ECB New Head Supports Stablecoins
According to ECB new President Christine Lagarde, central banks should consider stablecoins to help them stay ahead of the curve. In the past decade, the ECB has witnessed a rise in digital currencies, at a time when it is struggling with the challenges of a sluggish economy in the European region.
All the same, the bank believes in the new chief believes in the potential of crypto assets, especially the stablecoins. This could have triggered the interest in Libra, the Facebook-allied stablecoin.
However, Libra has received heavy opposition from various quarters since it declared its plans to launch. With back-and-forth with the regulators, it remains unknown if and when the Zuckerberg-led stablecoin will officially launch.
The Euro region is one of the fertile grounds for cryptocurrency trading and coin exchanges. While the area embraces firm regulations, European companies have always found a way to comply. In the next few days, the EU is set to launch the AMLD5 policy, which will impose stricter laws against money laundering.