Financial regulators of the world’s seven biggest economies will continue to oppose the launch of Facebook’s virtual currency Libra until proper regulations are in place, a new report has revealed. While recognizing that digital currencies could improve financial services access, they believe the regulatory structure currently in place isn’t equipped to oversee Libra. According to the Reuters report, finance ministers and central bankers of the G7 countries revealed that their anti-Libra stance hasn’t changed.
G7 members believe that Libra could undermine financial stability.
The G7, consisting of the U.S., Germany, Britain, Canada, France, Italy, and Japan, believes that Libra could undermine financial stability if launched under the current regulatory framework. The group believes that Libra could also undermine consumer protection, taxation, privacy, and cybersecurity. Facebook-backed Libra, and similar stablecoins, could be used for money laundering and terrorist financing, compromising market integrity and governance as well as undermining legal certainty, they said. According to the draft, G7 members continue to maintain that no global stablecoin project should begin operation until it adequately addresses relevant legal, regulatory, and oversight requirements.
The draft sounded an alarm regarding the rising threat of ransomware attacks.
According to the draft, several financial regulatory authorities in the G7 countries are currently exploring the opportunities and risks associated with CBDCs. However, it didn’t list the level of progress the regulators have made or if any of them were looking to launch a CBDC in the near future. Aside from CBDCs, the G7 draft sounded an alarm regarding the rising threat of ransomware attacks, with digital currencies being used to make payments. These attacks have been on the rise since the COVID-19 pandemic broke out, fueled by the influx of people conducting economic activities online. The draft comes just after the Financial Stability Board, a G20 body, published recommendations on regulating global stablecoins.