According to G7’s leaders, no stablecoin will be allowed to work at a global level after without getting a pass from the regulatory framework. As Facebook is going to release its stablecoin known as Libra, global financial leaders want to stop Libra’s launch for public use.
As Reuters reported, the draft statement about digital currency is prepared for a meeting of G7’s financial leaders from the top seven economies, including Britain, Germany, the United States, Italy, Canada, France, and Japan, of the world. However, it is stated in the draft that digital currency can improve the global financial system with the implication of digital payments thus removing extra costs and inefficiencies.
G7’s Concern over Facebook’s Libra
The draft layout reservations the global leaders are having for Facebook’s Libra. For instance, document lay out that the digital payment network must be properly regulated and managed to prevent any kind of issues such as financial instability, cyber-attacks, privacy issues, taxation, and vulnerability of consumer protection.
According to G7’s draft, the stablecoin project should address “relevant legal, regulatory, and oversight requirements through appropriate design and by adhering to applicable standards.”
After Facebook made its efforts faster in the creation of Libra, the Financial Stability Board of G20 proposed ten recommendations for the regulation of a stablecoin in April.
Per G7’s document, the concerned central banks, and financial authorities are working over researching of merits and demerits.
Recently, the European Central Bank publishes a paper saying the central must issue digital euro. According to ECB, the digital euro should complement cash instead of replacing it. Similarly, the Bank of England announced to launch a consultation program over state digital currency.
The draft also talks about increasing ransomware attacks, which is a very serious issue.
Libra project has faced severe reactions from global financial authorities. And it is also the main reason central banks started to work over state digital currency. But the majority of countries are in initial stages such as research development around CBDC. China is the leading country in the development of CBDC as the People’s Bank of China has launched final testing programs for digital yuan.