Economy

G7 says Libra should not launch until risks 'adequately addressed'

G7 says Libra should not launch until risks 'adequately addressed'”

It can be recalled that Mastercard, Visa, eBay, Stripe, and Mercado Pago followed the steps of PayPal to withdraw their support from Facebook's Libra Association.

But it warns of the potential for money laundering, terrorist financing and other forms of illicit activity as well as data theft.

"Some emerging countries have concerns on what could happen if stablecoins backed by a huge customer base become widely used globally", said Kuroda, who was among the global finance leaders gathered in Washington this week for the International Monetary Fund and World Bank fall meetings.

German Finance Minister Olaf Scholz on Friday redoubled his criticism of Facebook's plans to launch its Libra cryptocurrency, and said creation of a new world currency should be prevented.

The Group of Seven economies on Thursday had said any reserve-backed digital currency like Libra - known as a stablecoin - would require a sound legal framework before entering circulation.

"They didn't just say yes to a new currency as a medium of exchange; they consciously made a decision to transfer part of their sovereignty to the European level".

While setting regulations on stablecoins, policymakers will also debate ways to make existing cross-border settlement and payment systems more efficient, BOJ's Kuroda said. They said they want to completely veto the currency to "protect" the autonomy of democratic states, adding that the currency could also threaten control over exchange rates.

"I repeat our priority today is to work with regulators to answer their legitimate questions and provide all necessary assurances", said Bertrand Perez, managing director of the association. It is feared that it would be both hard to regulate and ensure that it does not disrupt monetary policy or facilitate money laundering and tax evasion. He said France would not allow a private company "to have the same monetary power as sovereign states".

He noted that Libra was due to be backed by a basket of currencies and assets, a principal sticking point.

Facebook's digital currency chief David Marcus told reporters in Washington that the issues raised by Le Maire are "legitimate concerns".

Details: If the USA fails to come up with a good answer to digital currency in the next five years, the future will be China "re-wiring" a large part of the world, Marcus said in a recent interview with Bloomberg.



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