Europe prepares to accept stablecoins
Libra remains one of the most promising stablecoins
FATF is ready to regulate stablecoins as cryptocurrency
Dollar Protocol The Future Of Algorithmic Stable Coins.
International consortium of news organizations developing transparency standards.
More recently, the anti-money laundering organization FATF proposed regulating the circulation of stablecoins in the same way as other cryptocurrencies. This means that users will be required to go through the mandatory KYC procedure, etc. How will this affect the development of the market in Europe and is there a future for stablecoins in the Eurozone.
The first major introduction of cryptocurrency into daily life in Europe took place in Prague in 2010, when Marek Palanius launched the Slush project. This was the first such initiative of this magnitude in Eastern Europe and has led to a significant increase in interest in this area. The Czech Republic is known for its loyalty to legislation in matters of prohibitions and restrictions, and the cryptocurrency market has also felt this for itself. Although the stablecoin is not considered a legal payment method, the Czech government does not have any penalties for its use. Few people know, but the first cafe with the ability to pay via bitcoin transactions was also opened in Prague, which once again confirms the progressiveness and openness to new things in this historic capital..
Even if such huge projects as LibraIn June 2019, Facebook announced preparations for the release of the digital currency Libra. The social networking project immediately attracted attention … More, while still not accepted by the international financial community, small innovative innovations will soon appear in Sweden. This Scandinavian country was able to very quickly move to a full cashless settlement system. Today, you can pay by credit card anywhere and for everything. Interestingly, it took less than four years to transfer the country online..
The Swedish government decided not to stop there and announced the launch of a new project – the creation of a crypto-crown, the main goal of which is to stop using any funds by the end of 2023. The entire financial transaction system will be based on blockchain technology to ensure the security and transparency of payments. The Swedish society, in turn, supported the idea of innovation and demonstrated a very high level of trust in this system. Central Riskbank and the business community have also expressed their agreement and acceptance of the e-krona project. A sample of a new digital currency will see the world already in 2021.
Germany has also taken a huge step forward and has now officially become the first European country to introduce norms regarding cryptocurrencies at the legislative level and thus legalize their use in the country. One of the main innovations was the registration of bitcoin as a new tool for processing financial transactions. Maintaining and running this initiative will help the German government reap significant benefits in the future. First of all, legitimizing the process of concluding cryptocurrency transactions carried out using stablecoins will be able to prevent money laundering and make the country’s financial market more transparent and controlled. Secondly, the absence of illegal currency trading, which previously existed in the digital space, will bring additional income to the budget in the form of taxes and transaction fees.
Over the past year, stablecoin technology has proven to be useful and necessary. Many experts, such as Sergey Onishchenko, founder of the European blockchain solutions company Blaize.tech, predict a significant future for the further development of the stablecoin industry and continue to create successful solutions in this area. Here’s what he thinks about the future prospects of the stablecoin:
“Currently, fiat currencies freely and categorically move across the territories, that is, here in Ukraine, for example, people cannot use another currency. Stablecoins are now making huge competition for fiat currencies, creating a new paradigm. It lies in the fact that the issuer of a stablecoin backed by fiat currencies will have to fight for its client in the near future, which is fundamentally different from the situation we have now, in which fiat issuers dictate the conditions for their users. In general, the future development of a stable currency will represent a constant struggle and competition between stablecoin issuers and the complete commercialization of this process. With this development of the situation, issuers can be represented by various organizations: corporations, capital owners, or even states. In the case of the latter, a stable currency must be secured by the state gold and foreign exchange reserve “.
Despite the growing popularity, the appearance of stablecoins also raises a number of questions and concerns associated, first of all, with their possible uncontrolled emission, as well as anonymity during transactions. Such anonymity can lead to the use of stablecoins for money laundering or terrorist financing, which could not fail to attract the attention of the FATF (Financial Action Task Force on Money Laundering). In this regard, a number of rules have been developed to regulate the global stablecoin. Stablecoins – literally translated from English “stable” coins – continue to gain popularity in the digital asset market. With … More turnover. Regardless of the structure issuing the stablecoin, its owners will be required to adhere to the established AML / CFT rules, and the FATF will also oblige issuers to introduce mandatory fixing and monitoring of transactions in order to track the movement of assets.
“Stablecoin on the blockchain has complete transparency, that is, you can see who paid where and where, so if we talk about the FATF rules, their implementation will not be difficult. However, the introduction of any regulation slows down the implementation, therefore, from my point of view, this may postpone their implementation by a year or two, but after the adoption of the FATF norms, the turnover will increase and the use of stablecoins will become easier than at present, ”comments Sergey Onishchenko, CEO Blaize.tech.
The MakerDAO example showed us that it is possible to use a currency issued by a decentralized, non-governmental structure, and large investment funds will support this idea, so in the near future we will see a large number of projects such as Libra (Facebook stablecoin In June 2019, Facebook announced preparations for the release of the digital currency Libra. The project of the social network immediately attracted attention … More). The restrictions created by states and financial structures will soon no longer be such a big obstacle and the creators of such projects will look for loopholes in order to bring them to life..
Some European countries have already recognized the power of the digital currency and pioneered its implementation in the country’s traditional financial systems, but experts emphasize that this is only the initial stage of a large process. The contribution that stablecoin technology can make to national financial institutions and companies is impressive, and many have yet to accept and start using it in the near future..
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