G7 Agrees on Crypto Action Plan Spurred by Facebook's Libra
G7 finance chiefs met this week and Facebooks Libra cryptocurrency was high on their agenda. They agreed on several crypto initiatives and fast regulatory responses to projects such as Libra, calling for them to meet the highest standards of financial regulation.
A Call for Urgent Action
The G7 finance ministers and central bank governors met in Chantilly, north of Paris, for a two-day conference on July 17 and 18. Other than France, which chairs this years meetings, the G7 comprises Canada, Germany, Italy, Japan, the U.K., and the U.S. In addition, the European Union has participated fully in the G7 since 1981 as a nonenumerated member. At the end of their meeting, the ministers issued the Chairs Summary of the decisions made.
Group photo showing some of the G7 finance ministers and central bank governors who attended the two-day meeting in Chantilly.
Ministers and governors acknowledged that while innovation in the financial sector can bring substantial benefits, it can also entail risks, the statement reads. They agreed that stablecoins and other various new products currently being developed, including projects with global and potentially systemic footprint such as Libra, raise serious regulatory and systemic concerns, as well as wider policy issues, which both need to be addressed before such projects can be implemented. The summary details:
Regarding regulatory concerns, ministers and governors agreed that possible stablecoin initiatives and their operators would in any case need to meet the highest standards of financial regulation.
Regarding systemic concerns, ministers and governors agreed that projects such as Libra may affect monetary sovereignty and the functioning of the international monetary system, the Chairs Summary continues.
G7 meeting of finance ministers and central bank governors in Chantilly.
On Libra, we had a very constructive and detailed discussion with a very large and shared consensus on the need for action, a French official told the AFP news agency. After chairing the first days meeting, French Finance Minister Bruno Le Maire was quoted by Reuters as saying:
The sovereignty of nations cannot be jeopardised … The overall mood around the table was clearly one of important concerns about the recent Libra announcements, and a shared view that action is needed urgently.
French Finance Minister Bruno Le Maire.
The issuance of a currency does not belong in the hands of a private company because it is a core feature of a sovereign state, German Finance Minister Olaf Scholz proclaimed. Asserting that Facebooks plans do not seem to be fully thought through, he is convinced Libra cannot go ahead without all legal and regulatory questions being resolved, the news outlet added. A senior Japanese finance ministry official who was at the meeting to ...