LONDON (Reuters) – Facebook’s proposed Libra cryptocurrency falls into a “big gap” in European Union financial regulation at a time when the bloc’s ability to tackle money laundering is already stretched, a top EU regulator said on Thursday.

FILE PHOTO: Small toy figures are seen on representations of virtual currency in front of the Libra logo in this illustration picture, June 21, 2019. REUTERS/Dado Ruvic/Illustration

Jose Manuel Campa, chair of the European Banking Authority (EBA) said it was necessary to “keep an eye” on cryptoassets like Libra. The watchdog had issued investor warnings before Libra was even mooted that cryptoassets could be channels for money laundering activities, he said.

Explaining that financial assets are covered by EU investment laws while electronic payments came under payments rules, Campa told the European Parliament’s economic affairs committee: “There is a big gap in between where most of these assets fall.”

An assessment of Libra so far indicated it would be “in that big…

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