It seems that the international intergovernmental economic organization Group of Seven (G7) does not consider Facebook’s proposed stablecoin Libra fully regulated as its financial leaders have said in a draft G7 statement that they will continue to oppose the stablecoin Libra and its launch until it is regulated properly.
The organization G7 or Group of Seven known as the “world’s largest economies” consists of seven countries including the United Kingdom, the United States, Germany, Italy, Canada, Japan, and France. According to a report by Reuters published on October 12, the draft statement was made for the meeting of central banks and finance ministers from these seven representative countries. They are of the view that stablecoin projects should not be allowed to operate until their regulatory status is cleared fully.
The G7 draft statement stated that there are various advantages of digital payments as they can lower costs while improving access to financial services. However, it said that these payment services need to be regulated and supervised properly in order to ensure the protection of consumers and their privacy. Also, if they are regulated they won’t pose a threat to financial stability, as per the draft statement.
Moreover, according to Reuters, the statement added that if stablecoins are not regulated and supervised properly, they may be utilized for illicit purposes such as money laundering.
The draft statement said that the organization will ensure that all of the stablecoins are adequately regulated before they are set out for operating. It said:
“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.”
Regulatory authorities from across the whole world seem to be highly concerned with the regulation of stablecoins. In the month of April, ten recommendations were issued by the Financial Stability Board (FSB) of Group of 20 (G20) stating a common approach for the regulation of stablecoins.
Various authorities from the G7 organization are also surveying Central Bank Digital Currencies (CBDCs) to know the risks and opportunities associated with them.
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