G20 finance ministers called on Friday, 18 October in Washington, D.C., to thoroughly assess the risks associated with ‘stablecoins’, such as Facebook's Libra, before they are launched.
"While acknowledging the potential benefits of financial innovation, we agree that global stablecoins and other similar arrangements with potential systemic footprints give rise to a set of serious public policy and regulatory risks. Such risks (...) need to be evaluated and appropriately addressed before these projects can commence operation", said the Japanese G20 Presidency in a statement issued at the end of the meeting.
The statement also welcomes the work of the Financial Stability Board (FSB) on this issue (see EUROPE 12351/15). In a note to the ministers, the FSB states that "an effective regulatory and supervisory approach needs to be able to identify, monitor and address potential risks in a reasonable range of scenarios and use cases". Such an approach requires, in its opinion, a clear understanding of the individual components of stablecoins and their interaction, including from a legal point of view.
The FSB therefore proposes to review current supervisory and regulatory approaches to determine whether they are adequate and effective to address financial stability concerns. On this basis, it will advise the G20 on the needs for possible multilateral measures, including a regulatory framework, in its final report expected in July 2020.
The G20 also asked the IMF to examine the macroeconomic implications of stablecoins, including monetary sovereignty issues in its member countries.
Paris, Berlin and Rome want to ban Libra
On Thursday 17 October, the G7 finance ministers had already agreed, in a statement issued by the French Presidency, that no project for stable cryptocurrencies should be launched until the legal, regulatory and supervisory problems and risks have been adequately addressed (see EUROPE 12352/14).
But some countries seem to want to go even further and faster. France, Italy and Germany are jointly preparing a series of measures to ban Facebook's stablecoin, the Libra, in the European Union, French Finance Minister Bruno Le Maire announced Friday at a press conference.
In the face of growing scepticism from regulators and governments - and after several of its partners decided to leave the project - Facebook is reportedly considering a new version of the Libra.
According to Reuters, David Marcus, the head of Facebook’s Libra project, told a banking seminar on Sunday that the initiative could use different cryptocurrencies based on different national currencies, instead of the synthetic one it initially proposed. (Original version in French by Marion Fontana)