In Europe, the European Central Bank (ECB) has urged Lawmakers to promote bank control on the establishment of stablecoins. In February 2019, through a legal memo, the ECB requested the right to determine the fate of stablecoins future. In that manner, dealings regarding stablecoin will fall under the jurisdiction of the ECB. ECB argues that, without its regulation, the conduct of monetary policy is under threat. It was also stated that the regulations provided by the EU would be obligatory on national establishments.
This statement backs up the calls of five European finance ministers, who necessitated sterner regulations of stablecoin in 2020. During that time frame, the ministers stated that the European Commission should regulate stablecoins, so that monetary sovereignty can be protected from exploitative private providers of digital currency. It was also requested that stablecoin commissioners that fail to reach a standard of operating in the EU region should be banned. The ministers also requested that stablecoins should be at a 1:1 ratio with the euro held in permitted organizations.
Even though the statement by the ECB is not directed towards a specific stablecoin project yet, many stakeholders of the industry believe that this new push for strict regulations arose due to threats from a Facebook-backed project. The Libra project, now renamed Diem, is backed by Facebook and may dominate the market. As a result, it serves as a threat, and several members of the government and digital currency competitors are aiming to act against it.
The Libra project declared and took after their plans to launch in the month of June 2020. Nevertheless, due to the threats it posed, the action experienced a lot of regulatory apprehensions. Concerns were especially met in the European Union region. In the case of the EU, numerous finance ministers and regulators expressed their opinions against the launch. Fake conspiracies were also created against the product.
To counter these attempts, the project restructured its roadmap and changed its name from Diem to Woo. Nevertheless, despite these attempts, EU regulators continued to conspire against this launch and paved obstacles in the path. The fears against this company are also there because Facebook has 3 billion users. The success of this business can completely change the global industry.