Financial leaders of the world’s seven biggest economies oppose the launch of Facebook’s Libra stablecoin until it is regulated, as per a G7 statement draft.
Digital payments can improve access to financial services and cut costs and inefficiencies, says the draft prepared for a meeting of finance ministers and central banks of the United States, Britain, Canada, France, Germany, Japan, and Italy.
However, such payment services need to be appropriately supervised and regulated to maintain financial stability, taxation, cybersecurity, privacy, and consumer protection.
As per the draft, stablecoins could be used for money laundering, terrorist financing, and compromise governance, legal certainty, and market integrity without proper supervision.
“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,” it said.
The draft also expressed concern about the rising threat of ransomware attacks that have been on the rise since the pandemic as it shifted economic activity online.
“These attacks, which often involve payments in crypto-assets, jeopardize essential functions along with our collective security and prosperity. We affirm our resolve to combat this threat collectively as well as individually,” the draft said.
Earlier this month, the US government warned that any person, business, or organization that pays a ransomware ransom or helps in its negotiations could face criminal prosecution or significant fines because these “payments benefit illicit actors and can undermine the national security and foreign policy objectives of the United States.”
The draft further notes that several G7 nations are exploring the benefits and risks associated with central bank digital currencies (CBDC).
European Central bank president Christine Lagarde said on Monday the bank itself is “very seriously” looking at creating a digital euro after ECB said this month that it should be prepared to issue a CBDC not to replace cash but to complement banknotes.
While the Federal Reserve and Bank of Japan have taken a back seat and China is airdropping its digital yuan, the Bank of England has launched a consultation on a digital pound sterling.