G7 to block Libra launch until properly regulated

Finance ministers of the G7 countries (G7) oppose launching the digital currency Libra until its issuer is properly regulated. This follows from a draft joint statement obtained by Reuters.

\n

Officials will note the potential for digital payments to expand access to financial services and reduce costs. But they will place particular emphasis on the fact that inadequate regulation could undermine financial stability, consumer protection, privacy, taxation, or cybersecurity.

\n

The financial leaders noted that in the absence of regulation, global stablecoins like Libra could not only become instruments for money laundering and the financing of terrorism, but also threaten market integrity and undermine legal certainty.

\n

“The G7 continues to insist that no global stablecoin will be launched until it fully satisfies legal, regulatory and supervisory requirements,” the statement said.

\n

In April the Financial Stability Board (FSB) under the G20 formulated ten recommendations for a common international approach to stablecoin regulation.

\n

In May the European Central Bank highlighted the need to close serious gaps in the regulation of global stablecoins before such projects are approved.

\n

In September the European Commission introduced regulatory rules for cryptocurrencies and stablecoins.

\n

In July the Libra project team said it does not back away from its original intention to launch a stablecoin backed by a basket of currencies.

\n

In April the Libra Association released an updated white paper outlining plans to develop several stablecoins, each pegged to a different fiat currency – the US dollar, the euro, the British pound and the Singapore dollar.

\n

Subscribe to ForkLog news on Facebook!