Concerns over Libra raised at G7
Finance ministers call for tighter regulation and more responsibility
G7 ministers have called for tighter regulation of digital currencies, with Facebook’s Libra igniting concern amongst the group.
Bruno Le Maire, France’s finance minister and current G7 president told a press conference that the group opposed the idea that companies could have the same privilege as nations in creating means of payment – but without undertaking the responsibility and obligations that go with it.
“We cannot accept private companies issuing their own currencies without democratic control,” Le Maire said.
The French presidency said the ministers and governors had agreed that “stablecoins and other various new products currently being developed, including projects with global and potentially systemic footprints such as Libra, raise serious regulatory and systemic concerns”.
Facebook has also faced opposition at home. The company has been hauled before the House of Representatives this week, to answer concerns about privacy as house members defended the dollar and challenged the company over its plans to protect user data. The country, including its president, has been vocal in their resentment of tech companies that are getting a little too close to comfort. Companies such as Amazon and Facebook have of late been lambasted for stepping on government toes as they encroach further into traditional government-held territory – such as issuing a currency.
The G7 are also concerned that Facebook’s ambitions for a digital currency might not only weaken their control over monetary and banking policies but also pose security risks.
“A global stablecoin for retail purposes could provide for faster and cheaper remittances, spur competition for payments and thus lower costs, and support greater financial inclusion,” European Central Bank board member Benoit Coeure, the chairman of the taskforce, told the G7 meeting.
“However … they give rise to a number of risks related to public policy priorities including anti-money laundering and countering the financing of terrorism, consumer and data protection, cyber resilience, fair competition and tax compliance.”