European countries are in favor of regulating fiat-backed cryptos, stablecoins.
Spain, Italy, France, Germany, and the Netherlands backed the European Commission’s goal to regulate stablecoins.
Until the regulatory, legal, and oversight challenges have been addressed, the five countries said on Friday that stablecoins should not be allowed to operate in the EU.
According to European countries, the regulatory framework of the EU for these coins should address risks to monetary policy and protect customers while maintaining their monetary sovereignty.
All stablecoins should be pegged 1:1 with fiat currency and the reserved assets denominated in the euro or any other currency of EU member states deposited in an EU-approved institution, they said.
Much like the Bank of England Governor said last week, the draft joint statement from these countries seen by Reuters, also wants the entities operating these stablecoins to be registered in the EU.
Facebook’s Libra has pushed stablecoins on policymakers’ agenda. Given that its governance body Libra Association is based in Geneva, it can impact their plans to issue its stablecoin.