G-7 Raised Systemic and Regulatory Concerns Considering Facebook’s Libra

At the Group of Seven meeting in France, the officials agreed that cryptocurrencies attached to real currencies should meet higher standards regarding financial regulation. This would be a way to avoid threats to banking stability or money laundering.

The French host of the meeting, Bruno Le Maire, along with Steven Mnuchin, U.S. Treasury Secretary, and finance ministers agreed that these matters should be addressed before the implementation of projects such as Facebook’s Libra.

Libra is supposed to be a cryptocurrency more stable than the Bitcoin, and usable for payment. Now governments around the world are figuring out the ways it could impact the economy.

As La Mire said, the G-7 officials remarked that Libra and other cryptocurrencies could help in providing financial services to underserved communities and diminish the cost of transfers. Yet, they would have to hold them accountable not just for corporations, but also the governments. Libra could become a source of terrorist financing or money laundering, and impact the worth of currencies that are already established.

These views seem to echo comments U.S. lawmakers made last week. In Washington hearings, they said that with recent data privacy breaches, Facebook shouldn’t be entrusted with a large project like Libra.

The summary of G-7 meeting says the countries are expecting the sketch of a global agreement on taxes for digital business until next January. It was also noted that the agreement would allow the companies to be taxed in countries where they aren’t physically present, and provide an arbitration forum.

France and the U.S. cannot agree about this issue after Paris announced they would put a 3 percent tax on companies like Google and Facebook, which are based in the USA. Munchin protested against this plan when he met Le Maire.

The French finance minister stated that before their country withdraws its tax, the ongoing agreement was supposed to lead to a final decision. Yet, according to him, the process moved in the appropriate direction.

The finance meeting of G-7 will be the background for the summit of the government and countries’ heads in August. Group of Seven includes the E.U. representatives, Britain, Germany, Italy, Canada, Japan, and above mentioned France and the U.S.