5 EU states call on European Commission to make strict regulations for asset-backed cryptocurrencies

In order to protect consumers and preserve EU’s sovereignty in monetary policy, the finance ministers of the five European Union member states, including France, Germany, Italy, Spain and the Netherlands called on the European Commission to make strict regulations for asset-backed cryptocurrencies such as stablecoins.

Stablecoins should not be allowed to operate in the 27-member bloc until legal, regulatory and oversight challenges had been addressed, the statement read.

Stablecoins, a type of cryptocurrency often backed by traditional assets, leapt onto policymakers’ agenda last year when social media giant Facebook revealed plans for its Libra token.

The EU’s regulatory framework for stablecoins should preserve the bloc’s monetary sovereignty and address risks to monetary policy, as well as protecting consumers, the five countries said in a statement.

The European Commission is likely to table its regulatory proposals by the end of this month.