Facebook announced plans to launch its own cryptocurrency called Libra earlier this year
China is also planning its own state-backed digital currency
The European Union is considering the development of its own digital currency that could rival Facebook’s Libra cryptocurrency.
Draft documents from the European Central bank urged the EU to come up with a consistent approach to all cryptocurrencies, which range from decentralised currencies like bitcoin, to state-backed efforts currently underway in China.
Until now, the bloc has failed to implement any significant regulation surrounding cryptocurrencies but several European countries have implemented their own rules.
Download the new Indpendent Premium app
Sharing the full story, not just the headlines
“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,” stated the document, which was seen by Reuters.
The draft could be discussed by finance ministers later this week, before potentially being adopted next month.
Facebook announced earlier this year that it plans to launch its Libra cryptocurrency at some point next year. It is designed to allow people to make and receive payments through Facebook-owned apps like Instagram, Messenger and WhatsApp, which are used by billions of people around the world.
Since its unveiling, however, Libra has faced significant resistance from financial regulators in the US and Europe. In September, French economy and finance minister Bruno Le Maire said that he would block the development of Libra and France as it posed a threat to “monetary sovereignty”.
Politicians in the UK have expressed similar reservations, with Digital, Culture, Media and Sport Committee Chair Damian Collins claiming that Libra represents Facebook’s attempt to “turn itself into its own country”.
Several of the payments firms that Facebook worked with in the early stages of Libra’s development, such as Mastercard and Visa, also recently dropped out.
In China, plans for a state-backed cryptocurrency appear to be moving forward as the country’s central bank prepares for a launch expected in the coming months.
Last week, President Xi Jinping hailed bitcoin’s underlying blockchain technology as an “important breakthrough”, marking an about-turn in the country’s official stance on cryptocurrency.
All negative sentiment towards the technology also appears to have been purged from Chinese social media, with cryptocurrency news resource CNLedger noting that “articles saying blockchain technology is a scam are now banned”.
A new law coming in to effect on 1 January will also serve to facilitate “the development of the cryptography business and ensuring the security of cyberspace and information”.