In the margins of the G20 meeting and the Annual Meetings of the IMF and the World Bank on Thursday 17 October in Washington, the G7 Finance Ministers set out their conditions for the development of stable cryptocurrency, such as the Libra by Facebook.
They adopted the report of the working group on stablecoins (see EUROPE 12279/12), coordinated by Benoît Coeuré, member of the ECB's Executive Board, which had been requested by France in June, just after Facebook's announcement of its cryptocurrency project (see EUROPE 12277/24).
“We agree that no global stablecoin project should begin operation until the legal, regulatory and oversight challenges and risks are adequately addressed, through appropriate designs”, says a statement by the French G7 Presidency, which includes the report’s main recommendations.
The final report does not specifically target Libra, but confirms that stablecoins, in general, pose legal, regulatory and supervisory challenges and risks related to, inter alia, security, money laundering, market integrity and data protection (see EUROPE 12299/11).
According to the French Finance Minister, Bruno Le Maire, this also poses risks in terms of competition and, above all, risks for the monetary sovereignty of countries. “The current legal framework is clearly not ready to control all these risks nor to protect the consumers using this currency”, he told reporters in Washington.
While the report mainly details the risks, it also makes some recommendations for controlling them, including coordinating the surveillance standards that countries set for these new technologies.
However, this does not mean that the G7 countries are against technology and financial innovation, Mr Le Maire insisted. In the long term, central banks will also assess whether they should issue virtual currencies themselves, he said.
The G7 Presidency statement also welcomes the G20’s “cooperation”, which also assesses the need for a multilateral response to stablecoins, including the work of the Financial Stability Board (see EUROPE 12351/15).
See the report: http://bit.ly/2pzNUE5 (Original version in French by Marion Fontana)