EU considers launching public digital currency in response to Libra

An EU draft document has urged the European Central Bank (ECB) to consider issuing a public digital currency in response to the Facebook-led Libra project.

Facebook unveiled its plan to launch its own cryptocurrency back in the summer, but the beleaguered project has been met with a wave of scrutiny.

As a result of growing regulatory pressure, the Libra Association has lost a quarter of its original members, including payment processing giants Visa and Mastercard.

However, the notion of a Facebook-led digital currency that has the potential to reach billions of users has caused worldwide panic, forcing countries to rethink their stance on digital currencies.

Back in September, both France and Germany openly slated the project, claiming it poses substantial risks to the financial sector.

Both countries also indicated they would support a public alternative.

Now, an EU draft text has urged the bloc to devise a general approach to cryptocurrencies, which could see it ban projects labelled as high risk.

Reuters states that EU finance ministers could adopt the draft document as soon as next month, rapidly accelerating the bloc’s regulatory campaign against cryptocurrencies.

The draft reads: “The ECB and other EU central banks could usefully explore the opportunities as well as challenges of issuing central bank digital currencies including by considering concrete steps to this effect.”

The news comes shortly after ECB board member Benoit Cueure weighed in on the debate, suggesting the bank should “step up” its thinking on digital currencies.

Interested in reading more Libra-related stories? Discover more about a Chinese lawmaker slamming the project by stating “Libra is delusional”.