E.U. officials have established tough hurdles for Facebook’s proposed cryptocurrency Libra as well as other private digital currencies, saying they shouldn’t receive regulatory approval until the risks they pose are better understood.
E.U. ministers issued a statement Thursday confirming what many had expected to be a hardline stance on products like Libra.
“No global ‘stablecoin’ arrangement should begin operation in the European Union until the legal, regulatory and oversight challenges and risks have been adequately identified and addressed,” the European Commission and Council said in a joint statement.
They said that initiatives like Libra present opportunities for “cheap and fast payments,” but also pose risks related to money laundering, cyber security, and terrorism financing.
The EU’s stance represents the latest setback for Facebook’s Libra, which experienced a major blow in October when partners eBay, Visa, Mastercard, and Stripe announced in quick succession that they were withdrawing from the project.
The companies faced pressure from some U.S. lawmakers who expressed doubt that Facebook was up to the task of managing a cryptocurrency.
The defections threw a wrench into Facebook’s plan to launch the cryptocurrency by 2020. But Libra co-creator David Marcus said he remains optimistic despite the defections.
“Change of this magnitude is hard. You know you’re on to something when so much pressure builds up,” Marcus said on Twitter in October.
Facebook CEO Mark Zuckerberg expressed some of his own uncertainties about Libra when testifying before Congress recently.
“I actually don’t know if Libra is going to work, but I think it’s important to try new things as long as you’re doing so responsibly. That’s whats made America successful and it’s why our tech industry has led the world,” Zuckerberg said before the House Financial Services Committee in October.