France, Germany, Italy, Holland and Spain pitch a warning to the European Commission on cryptocurrencies, asking for clear and certain rules on the matter pending the proposal that Brussels should present by the end of the year.
Through a joint note signed by the finance ministers of Germany, Olaf Schoz, France, Bruno Le Maire, Italy, Roberto Gualtieri, Holland, Wopke Hoekstra and Spain, Nadia Calvino, the ministers of the five largest economies of the Eurozone explain that 'the regulatory framework for asset-backed crypto-assets in the EU should serve two crucial priorities: on the one hand preserve our monetary sovereignty and address the risks to monetary policy, and on the other hand protect consumers”.
“We are concerned about cryptocurrencies – said Le Maire – we are waiting for the Commission to publish very clear and strong rules to prevent its abuse, for terrorist activities or for money laundering and we want to establish a simple principle: the Central Bank, the ECB is the only one that is allowed to issue currencies. And this point is something that cannot be undermined by any type of project, including libra” (Facebook's would-be virtual pseudocurrency ed.). “We want the ECB – reiterated Le Maire – to be the only issuer and this is the meaning of our joint statement”.
European legislation should provide for riron and precise rules to be applied to the different types of asset-backed crypto-assets. Specifically, each unit of asset-backed crypto-asset created must be pledged at a ratio of 1:1 to fiat currency. Assets eligible for reserve will have to be limited to deposits, placed with a credit institution approved by Brussels or to a fraction of highly liquid assets, subject to the provision of adequate collateral. Not only that, the assets for the reserve must be denominated in euros or in a currency of a member state of the European Union, be held separately from other reserves and not be convertible in order to avoid exchange rate risk.
For asset-backed crypto-assets that are intended to be widely used for payment purposes, users will have a direct claim on the reserve and issuer so that it can be redeemed, at any time and at face value, crypto-asset legal tender.
Furthermore, all entities operating as part of an asset-backed crypto-asset scheme in the EU must be registered in the Union before starting any business.
Finally, it is necessary to provide for rules to combat money laundering, terrorist financing and fair competition and to require requirements regarding the regulation on data protection.
"I think today's release is a very strong signal that we are united - said the Minister of Economy, Roberto Gualtieri – and committed to ensuring that, on the one hand, we support financial innovation, and on the other, we protect financial stability, consumer protection and sovereignty”. For her part, the Spanish Calvino said that it is wrong to call these entities currencies as they are "assets", encrypted financial assets.
