The Group of Seven expressed its decision to oppose the launch of Facebook's Libra cryptocurrency.
Facebook appears to be facing a major hurdle for its cryptocurrency project Libra. Finance ministers and central bankers from seven of the world's largest economies have published a bill stating that they will oppose the launch of the stable Pound currency until appropriate regulations are in place.
In a draft released on Tuesday, October 13, the Group of Seven (G7) said it would oppose the launch of Facebook's Libra cryptocurrency until it is properly regulated, CoinTelegraph said. The G7 is comprised of the seven largest economies in the world, such as the United States, Canada, Japan, Germany, France, Italy and the United Kingdom
According to Reuters, the draft was prepared for a forthcoming meeting between central bankers and finance ministers from G7 member countries. While the G7 noted that digital payments have their advantages, such as cutting costs and deepening access to financial services, the group said that the cryptocurrency industry needs to be regulated and supervised for a number of reasons, such as taxation, cybersecurity, protection of consumer and stability of the financial system.
The group fears that stablecoins, like Facebook's Libra, could be used to finance terrorism, money laundering and other illegal activities. Stablecoins are supported by a traditional currency or basket of assets, making them resistant to volatility.
"The G7 continues to maintain that no global stablecoin project should start operating until it adequately meets the relevant legal, regulatory and supervisory requirements through an appropriate project and adhering to applicable standards," said the draft of the Group of Seven. The document also explored the potential risks and opportunities of central bank digital currencies (CBDCs).
The Group of Twenty (G20), an international forum of 19 countries and the EU, is also concerned about potential problems with stable currencies. In April, the G20 issued 10 recommendations for a common approach to regulating assets.
The European Central Bank has officially joined the race to create its own CBDC, also known as the digital euro. ECB President Christine Lagarde said the institution is "very seriously" considering creating a digital euro to complement existing banknotes.