G7 Finance Chiefs Call On Cryptocurrencies, Facebook's Libra To Be Strictly Regulated

Daniyal Sohail Published July 18, 2019 | 08:57 PM

G7 nations' finance chiefs are calling for cryptocurrencies, including new Facebook's Libra, to be strictly regulated since otherwise they will destabilize world's economy and turn into a tool for money laundering and terror financing, the group's preliminary report said Thursday

MOSCOW (UrduPoint News / Sputnik - 18th July, 2019) G7 nations' finance chiefs are calling for cryptocurrencies, including new Facebook's Libra, to be strictly regulated since otherwise they will destabilize world's economy and turn into a tool for money laundering and terror financing, the group's preliminary report said Thursday.

Facebook announced in June that it planned to launch its own cryptocurrency called Libra in 2020. The IT giant said that the cryptocurrency would be operated by a Swiss non-profit organization, called the Libra Association.

"They give rise to a number of serious risks related to public policy priorities including, in particular, anti-money laundering and countering the financing of terrorism, as well as consumer and data protection, cyber resilience, fair competition and tax compliance ... They could also pose issues related to monetary policy transmission, financial stability and the smooth functioning of and public trust in the global payment system," the report said as quoted by the Financial Times newspaper.

Such cryptocurrencies as Libra, or "stablecoins," are particularly worrying, according to G7, being anchored to a reference asset such as a sovereign Currency, or a basket of assets. In this regard, G7 has articulated four main recommendations.

First, stablecoins should become subject to though supervision. Second, their initiatives should be implemented in a legal framework in all relevant jurisdictions, so that all stakeholders and users get adequate protection and guarantees. Third, stablecoins should ensure "operational and cyber resilience." Fourth, the assets must be managed transparently and securely in order to safe market integrity.