Facebook’s Libra gets stark warning from G-7 finance chiefs
19 Jul 2019

AP — Finance chiefs from the Group of Seven rich democracies issued a stark warning on Thursday that cryptocurrencies like the Libra digital money recently unveiled by Facebook should not be allowed before “serious regulatory and systemic concerns” are addressed.

France, which this year chairs the G-7 gatherings on topics ranging from the economy to security, said it is worried that what some call the “future of money” – encrypted digital currency – could spiral out of control.

France’s concluding summary from this week’s meeting said that the finance officials agreed that while cryptocurrencies could help make payments cheaper and more efficient around the world, they could also be used for money laundering and terrorism financing and could even endanger the stability of global currencies.

Host French Finance Minister Bruno Le Maire likened the creation of Libra to the development of a whole new state.

“We won’t allow private states to emerge that would have the same privileges of a state but without the controls that go with it,” Le Maire told reporters after the meeting in Chantilly, near Paris.

Facebook has proposed pegging Libra to existing currencies to make it more stable than the likes of Bitcoin and useable as a way to pay for things. Governments around the world are rushing to assess how that would affect or destabilize the economy — if, for instance, the cryptocurrency decides to weigh in favor of the dollar or the euro.

Facebook played a key role in creating the underlying technology for Libra, which after the launch in 2020 will be overseen by a nonprofit organization, the Libra Association. Other members of the association include MasterCard, PayPal, Visa, Spotify AB, Vodafone Group, venture capital firms and nonprofits.

The officials agreed that cryptocurrencies like Libra will have to meet “the highest standards” of financial regulation before they can be implemented.

By Thomas Adamson, AP, 18 July 2019

Read more at the Associated Press

Photo: European People’s Party [CC BY 2.0], via Wikimedia Commons

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