G7 Set To Oppose Facebook Libra Over Lack Of Regulations
Facebook’s proposed global digital currency Libra is expected to get pushback from G7 leaders who are anticipated to publicly oppose the project due to a lack of regulations, according to a Reuters report on Monday (Oct. 12).
The draft will be presented on Tuesday (Oct. 13) during a meeting of finance ministers and central bankers from the U.S., Canada, Japan, Germany, France, Italy and Britain. The meeting will discuss the pros and cons of digital payments and financial services.
The draft statement seen by Reuters indicated that any electronic currency system would have to be “appropriately supervised and regulated so that they would not undermine financial stability, consumer protection, privacy, taxation or cybersecurity.”
The fear is that stablecoins could be used for money laundering and terrorist financing, among other crimes.
“The G7 continues to maintain that no global stablecoin project should begin operation until it adequately addresses relevant legal, regulatory, and oversight requirements through appropriate design and by adhering to applicable standards,” the draft said, as per FT.
The G7 draft also notes that a number of G7 authorities “are exploring the opportunities and risks associated with central bank digital currencies (CBDCs).”
The European Central Bank head Christine Lagarde said on Monday that the bank was “very seriously” looking into a digital euro.
The G7 draft also considered what to do about the rise in ransomware attacks due to COVID-19 and the online shift in economic activity.
“These attacks, which often involve payments in crypto-assets, jeopardize essential functions along with our collective security and prosperity. We affirm our resolve to combat this threat collectively as well as individually,” the draft said.
Libra has had a topsy-turvy entre into the digital currency arena. Last year, Facebook head Mark Zuckerberg appeared before the U.S. House Committee on Financial Services to both promote and defend Libra.