Libra release will require compliance with the highest regulatory standards

The G-7 Working Group warned that Libra and other corporate cryptocurrencies pose a threat to global financial stability.

According to the message
Reuters, a working group created by
G7, to study this problem, said that adhering to the “highest” standards is necessary to minimize the use of digital currencies for money laundering and terrorist financing. This week after the group meeting in France, G7 also announced that it would consider taxation issues arising in the digital economy.

As expected, the Libra cryptocurrency and the assumed risks it poses to the monetary policy of regulators were the focus of the meeting, although some of the benefits of the project were considered. Board Member of the European Central Bank Benoit Coeure, who heads the G7 working group, said:

“A global stablecoin for retail purposes could provide faster and cheaper remittances, encourage competition for payments and, consequently, reduce costs and ensure greater availability of financial services.”

However, he noted that such cryptocurrencies create “serious risks” to combat money laundering and the financing of terrorism, protect consumers and data, compete and enforce tax rules.

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Francois Villeroy de Galhau, chairman of the Central Bank of France, said that while regulators are seeking to encourage innovation, “they cannot be distributed to the detriment of consumer safety.”

In the article
The Financial Times quotes Köhre as saying that cryptocurrencies like Libra “can create problems related to the implementation of monetary policy, financial stability, uninterrupted functioning and public confidence in the global payment system.”

French Finance Minister Bruno Le Maire reiterated previous concerns about the threat posed by the dominance of the token, produced by a technology firm with billions of users, over national currencies. He stated that “the sovereignty of nations may be weakened or endangered by these new currencies.”

The draft of the “Big Seven” states that developers of stablockcoins will need to carry out “significant work” before they can get approval from regulatory authorities. The Financial Times quotes from the document:

“Since large technology or financial companies can use a vast base of existing customers to quickly achieve a global presence, it is imperative that the authorities remain vigilant in assessing the risks and consequences of such actions for the global financial system.”

Regulators around the world are discussing potential Libra problems. Two days ago two hearings were held.
on this topic in the US Congress, and the German Finance Minister stated that “Libra cannot be allowed to compete with the euro.”

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