Financial leaders of the world’s seven biggest economies are set to reveal they will oppose the launch of Facebook’s Libra cryptocurrency project until it’s properly regulated, according to a draft G7 statement.
The draft, Reuters reports, was prepared for a meeting of financial ministers and central bankers from the United States, Japan, Germany, France, Canada, Italy, and Britain, and said digital payments could improve access to financial services while cutting inefficiencies and costs.
The document reportedly added, however, that such payment services have to be appropriately supervised and regulated so they won’t undermine financial stability, privacy, consumer protection, taxation, or cybersecurity. Without supervision, stablecoins like Libra could be used to launder money, finance terrorism, or compromise market integrity, it said.
The draft reads:
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
In April, the G20’s Financial Stability Board published 10 recommendations for a common, international approach to regulating stablecoins, prompted by the developments Facebook and the Libra Association have been making towards a launch.
The G7’s draft points out authorities within the group are exploring the opportunities and risks associated with a central bank digital currency (CBDC). The European Central Bank, for example, said it should prepare to issue a digital euro to complement banknotes, while the Bank of England has launched consultations on a digital pound sterling.
The draft statement also expresses concern on the rising threat of ransomware attacks, which involve cryptocurrency ransoms. It notes these could “jeopardize essential functions along with our collective security and prosperity.”
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