BRUSSELS, BELGIUM -- The European Union is effectively banning digital currency like Facebook's Libra until there are clear rules and regulations in place.
The so-called "stablecoins" come with benefits and risks, according to a statement from the European Council and Commission.
It notes that the technology can make payments faster and cheaper across borders but the nature of the currency could be exploited to fund terrorism or launder money.
While some countries have already introduced legislation, the Commission vice president says the global reach of the technology requires a larger framework.
This comes as the US is figuring out how to regulate digital currency domestically.
In October, Facebook founder and CEO Mark Zuckerberg defended Facebook's controversial plan for digital currency, also known as Libra.
During a House hearing, Zuckerberg argued that Libra will help many people who are "shut out" of the global financial system. He said it's about "putting power in people's hands."
He admitted that Libra may not work but argued that is "important to try new things." Some lawmakers have raised concerns about digital currency and privacy. Zuckerberg warned that China is moving quickly toward creation of a digital currency.
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