The European Union is thinking about developing its own cryptocurrency, similar to Facebook’s ‘Libra’ which is due to launch sometime in 2020.
It will allow users to make and receive payments through apps that Facebook owns such as WhatsApp, Messenger and Instagram, the Independent reports, apps that are used by billions of people all over the world.
Libra itself has caused some controversy and faced resistance from financial regulators in Europe and the US, with Bruno Le Maire – French economy and finance minister – saying he would block its development in France for posing a threat to “monetary sovereignty”.
Facebook’s ‘Libra’ cryptocurrency is slated for a 2020 launch
Similarly, UK politicians have also expressed their concerns, with Damian Collins – chair of the Digital, Culture, Media and Sport Committee – suggesting that Facebook’s cryptocurrency is its attempt to “turn itself into its own country”.
But now draft documents from the European Central Bank are calling on the EU to devise a consistent approach to all cryptocurrencies. Until now, no real regulations have been implemented regarding cryptocurrencies but some countries in Europe have brought in their own rules.
The draft, seen by Reuters, read: “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.”
People’s Bank of China to issue own crypto?
According to Bloomberg, a senior official of the People’s Bank of China says the organisation is close to issuing its own version of bitcoin, with researchers having been working to develop systems over the past twelve months.
People’s Bank of China in Beijing, China
Patents registered by the bank show that businesses and consumers would be able to download a wallet to their smartphones and swap yuan (Chinese currency) for digital money, which could then be used to make and receive payments. It would also track it each time money changes hands.
Executive director at BC Technology Group Dave Chapman noted there is no doubt that Libra’s announcement has spurred governments, central banks and regulators to bring their plans forward and rethink their strategies where digital assets are concerned.
Tax and cryptocurrency
Navigating your way around the tax matters that relate to bitcoin and the other cryptocurrencies that now exist can be quite confusing. There is some guidance available on the HMRC website on how crypto profits should be treated, but you may find that you need some help or advice from a UK tax cryptocurrency expert.
Cryptocurrencies are finally hitting the mainstream but there still isn’t a lot of clear guidance in place for businesses looking to declare their crypto gains legally.