Draft G7: Libra stablecoins cannot be issued until proper regulation is launched

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According to Reuters, a draft statement to be issued by the Group of Seven (G7) on Tuesday shows that they oppose the issue before the appropriate launch. The statement said: “Until the relevant laws, regulations and supervision requirements are fully satisfied, global stablecoin projects are not allowed to start operations.”

The draft was prepared for meetings of finance ministers and central banks in the United States, Canada, Japan, Germany, France, Italy, and the United Kingdom. The draft pointed out that digital payments can improve access to financial services, reduce inefficiency and reduce costs.

But such payment services must be properly supervised and managed so as not to endanger financial stability, consumer protection, privacy, taxation, or network security.

Without proper supervision, such stablecoins may be used for money laundering and terrorist financing, undermining market integrity, governance, and undermining legal certainty.

Stable coins are tied to traditional currencies for payment or storage of value.

After the social media giant Facebook proposed the Libra stablecoin project, the Financial Stability Board (FSB) of the Group of 20 nations put forward 10 recommendations in April, proposing a common method for international regulation of stablecoins.

The G7 draft pointed out that some G7 authorities are exploring opportunities and risks related to central bank digital currency (CBDC).

The European Central Bank (ECB) said this month that it will issue a digital euro to supplement banknotes. European Central Bank President Christine Lagarde said on Monday that the bank is “very seriously” considering creating a digital euro.

The Bank of England also initiated negotiations on the digital pound, but so far, the Bank of Japan and the Federal Reserve have retreated to the second place.

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The G7 draft also expresses concern about the rising threat of ransomware attacks. As the new crown pneumonia epidemic shifts economic activities to the Internet, the threat of ransomware attacks is increasing.

The draft stated, “These attacks usually involve crypto-asset payments, endangering basic functions and our collective security and prosperity, and we are determined to deal with this threat together.”

Author Amy Liu