A draft statement has revealed that the G7 leaders will oppose the launch of Facebook’s Libra stable coin until it is adequately regulated. The draft, which Reuters reviewed, was prepared to meet finance ministers and central bankers of the United States, Canada, Japan, Germany, France, Italy, and Britain. The draft says that while digital payments could improve access to financial services, cut inefficiencies and costs, but such services need to be appropriately supervised, reports Reuters.
“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 reportedly reads.
For the uninitiated, Stablecoins are tied to traditional currency or basket of assets and used for payments or storing value.
As per the G7 leaders, digital services regulation is important not to undermine financial stability, consumer protection, privacy, taxation, or cybersecurity. If left unsupervised, stablecoins can be misused for terrorist financing, money laundering, ‘undermine legal certainty,’ among other things.
Reportedly, the G7 draft also mentions concern about the increasing threat of ransomware attacks as the COVID-19 pandemic continues to affect economies all over the world. “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.
In April, G20 leaders set out a rulebook of 10 recommendations for a common, international approach to regulation digital currencies like Facebook’s Libra.