Facebook’s Crypto Libra Falls Into The “Big Gap” Of Laws: European Banking Authority Official
- EU laws unclear on where Facebook’s so-called cryptocurrency Libra falls
- No consensus within the 28-country EU on money laundering authority
- They also have “very limited resources” to ensure the compliance of the rules
Jose Manuel Campa, chair of the European Banking Authority (EBA) said it was necessary to “keep an eye” on digital currencies like Libra.
The watchdog actually issued warnings about crypto assets usage for money laundering activities before Libra was even introduced, added Campa.
Europe authorities are not at all feeling good about Facebook’s Libra. Just recently, European Central Bank (ECB) executive board member, Yves Mersch used strong language on social media giant’s so-called cryptocurrency.
He warned about its centralized nature and “treacherous promises.”
While explaining how financial assets fall under EU investment law and electronic laws are covered by payment rules, Campa told the European Parliament’s economic affairs committee,
“There is a big gap in between where most of these assets fall.”
And an assessment of Libra so far indicated, it would “in that big gap,” he added.
EU Has Its Own Issues to Deal With First
As Europe witnesses, a series of banking scandals, including Danske Bank, the biggest lender of Denmark that admitted to handling 200 billion euros of suspicious transactions through its Estonian branch, money laundering measures have shot up on its agenda.
However, the issues come with the fact that there is no consensus within the 28-country EU for a standalone agency to crack down on money-laundering. This leaves the enforcement task up to national authorities that have different approaches and wide discretion.
This, the lawmakers said on Thursday makes EBA look like a poorly resourced “paper tiger” as it is only able to issue guidelines to national regulators.
Campa also shared that the Paris-based agency has just three staff working on ensuring that national authorities company with anti-money laundering rules. However, another eight people are due to be added over the next three years.
“We have very limited resources,” Campa said.