G7 will not allow Libra to go live before proper regulations
- G7, a group of major global economies, announced recently that it will not allow Facebook to launch Libra.
- According to them, global stablecoins cannot be allowed without being properly regulated.
- Facebook has run into similar issues before due to fears of global stablecoins threatening financial systems.
Recent reports have revealed that the Group of Seven (G7) plans to prevent the launch of Facebook’s Libra. Concerned about the first global stablecoin, the world’s largest economies will halt the project until adequate regulations arrive.
G7 believes that global stablecoins threaten the financial systems
In a draft of a statement, the world’s largest economies, known as G7, which include the US, Canada, Germany, France, the UK, Italy, and Japan, revealed that they will initially oppose Libra’s launch. According to them, global stablecoin such as Libra cannot be allowed to go live without proper regulations.
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The statement comes from representatives of these seven countries, assembled in June 2019. Their goal was to examine central banks’ efforts to regulate digital coins. Since then, the group has announced its concerns over ensuring that digital assets would be in compliance with AML laws and procedures, as well as other matters regarding regulations.
Last October, the group reported that global stablecoins, such as Libra, could threaten the financial system.
Their new announcement says that “The G7 continues to maintain that no global stablecoin project should begin operation until it adequately addresses relevant legal, regulatory, and oversight requirements through appropriate design and by adhering to applicable standards.”
In other words, the group’s stance on global stablecoins has not changed much over the past 12 months, and they still continue to view them as a threat.
Facebook has been opposed before
This is likely going to put a stop to Facebook’s plans on getting regulatory approval from the authorities. Of course, this is far from being the first time that Facebook had run into a wall while trying to launch Libra. Just last year, a number of European countries, including Germany, France, Italy, Spain, and the Netherlands partnered up to prevent it from doing just that.
Then, in April of this year, G20 issued a comprehensive stablecoin study, offering 10 recommendations on how they could be properly regulated. One major concern included ransomware attacks, which could jeopardize essential functions, as well as collective security and prosperity.