The Diem token launched by Facebook’s Mark Zuckerberg seems to have put fears in the hearts of some lawmakers. Hence, they are thinking of empowering the European Central Bank to regulate cryptocurrencies and prevent projects like Facebook’s Diem, from outranking the fiat currency. It is noteworthy that Facebook’s move to launch its cryptocurrency will open the door for other giant companies in the tech industry to follow in Facebook’s footsteps and launch their tokens and cryptocurrencies too.
This has necessitated the call from European lawmakers to rise quickly to the situation. According to an MEP Member of the European Parliament) lawmaker Dr. Stefan Berger, Zuckerberg Is aiming to become a central bank, and he must be stopped. Berger was the one who called for an amendment to the bill to regulate cryptocurrencies.
ECB to Regulate Cryptocurrencies
In the proposed bill, the ECB will be asked to create the same regulation guiding the provision, issuing, and usage of cryptocurrencies in the EU territory. The bill, which is now a subject of debate in the parliament, has suggested that the ECB be more stringent in its conditions for the approval of cryptocurrencies. If the proposal becomes successful, the ECB will have more power to reject some crypto projects intended to operate in the EU territory.
Also, the bill’s successful passage will make the EU the territory with the most stringent crypto regulation in the world. According to Dr. Berger, it is now time for the EU to get ready for the imminent strength of stablecoins, especially Facebook’s newly launched Diem which aims at dominating the crypto space and outperforming the fiat currency by taking advantage of its scalability, low transaction fees, and swift processing of transactions.
Meanwhile, the European Union has not made a specific law relating to the regulation of cryptocurrencies. While most regions accept cryptocurrencies as lawful, each state reserves the right to make its regulations concerning crypto exchanges. The same condition applies to crypto-related tax.
Facebook’s Diem Will Disrupt the Fiscal System
EU lawmakers are still frightened by Diem, formerly known as Libra. They claim that the token, if successful, will disrupt the fiscal system of the region; hence, it should be halted. Some concerned politicians have already proposed bills to regulate stablecoins to authorize ECB to regulate the crypto industry. To buttress his point, Dr. Berger stressed that Facebook, if allowed to launch its stablecoin, could take advantage of its over 2 billion users and become a central bank someday.
He added that the fact that private individuals are not allowed to control currencies, Facebook should also be prohibited from doing so. According to the lawmaker, the region should push for a digital Euro, which should be launched as quickly as possible before Facebook and other regions start launching their digital currencies. He concluded that the region needed a secure digital currency to catch up with the ever-evolving digital space.
However, crypto programs such as Diem and some other stablecoins have outpaced the ECB in establishing digital currencies. The EU is now looking at making regulations regarding the crypto industry. In 2018, the ECB president, Mario Draghi, declared that the bank, in collaboration with authorities were putting in place measures aimed at assessing the risks associated with the use of cryptocurrencies.