The European Commission, the executive arm of the E.U., has drawn up regulation to tightly monitor cryptocurrencies it considers “significant”, including asset-backed stablecoins like Facebook’s libra. Euractiv, a European news outlet, first reported the news on Sept.10, citing a leaked 167-page draft crypto proposal.
According to the report, the regulation will seek to tackle bitcoin’s high volatility as well as “risks posed by systemic ones, like libra” by creating a “new college of supervisors” involving existing national and continental regulatory agencies – and one new additional body – all chaired by the European Banking Authority (EBA).
The legislation will be tied to the level of risk posed by each crypto asset, with tougher requirements on issues such as supervision and obligations applied to what it calls “significant e-money tokens”.
For example, the Libra Association, issuers of libra, will have to become a credit institution or an electronic money institution under the supervision of the EBA,…