The European Commission is requesting Facebook Inc. and the Libra Association to answer questions in relation to the cryptocurrency project's financial stability, as well as risks of money laundering and data privacy, London's Financial Times reported.
The EC also expects responses on how the Libra project would manage reserves, protect customer data and tackle potential extensive use of the digital currency. The commission sent the questionnaire during the week of Oct. 4, the FT said.
Through the questionnaires, EC Vice President Valdis Dombrovskis, who is in charge of financial services and stability in the European Union, intends to determine if Libra could be allowed to operate in the bloc, and to consider potential regulation and legislation required to oversee Libra's operations.
The remaining 27 financial supporters of Libra are set to sign a membership declaration Oct. 7 to show support for the cryptocurrency project. PayPal Holdings Inc. recently withdrew from the project, while Visa Inc. and Mastercard Inc. are reportedly considering to step back.
EU finance ministers are also set to call for a global regulatory response to "stablecoins," such as Libra's, during an upcoming G-20 meeting in Washington, D.C., from Oct. 17-18, Reuters reported, citing an EU document.
The European Central Bank, which questioned Libra representatives about details on the currency's scope and design, is expected to present a report on the matter during the G-20 meeting.
The French government earlier expressed its intent to block the establishment of the Libra project in Europe due to concerns about consumer risk and governments' monetary sovereignty. Germany and France said it backed the development of an alternative public cryptocurrency to Libra.
