G-7 Task Force Releases Full Report on Impact of Global Stablecoins

Facebook's Libra cryptocurrency faces new hurdle from G7 nations

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.

The Group of 20 leading economies warned that without proper regulations in place, Facebook's digital currency could give room for money laundering and terror financing.

"Libra is not welcome on European soil", Le Maire told reporters the sidelines of the annual meetings of the World Bank and International Monetary Fund.

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.

But European officials say they want to go even further by blocking the currency outright.

Stablecoins, on the other hand, are more readily usable as a means of payment and store of value and could potentially develop global payment systems that are faster, cheaper and more inclusive than present systems.

"At the same time, we must protect the autonomy of democratic states", he said. Italian Finance Minister Roberto Gualtieri agreed, saying there was a "strong consensus" among countries to put a block on private currencies. He opined that there is a high probability that the stablecoins, which serve as a virtual currency backed by a reserve asset, prosper in the future as a part of the financial niche.

"All Facebook would have to do would be to decide to use more or fewer dollars or euros to affect the exchange rate between the euro and the dollar, and thus have a direct impact on trade, industry and nations which use the dollar or euro as their base currency", he said.

That announcement was immediately trailed by news that the German government had endorsed a blockchain technique to avoid stablecoins from getting to be elective monetary forms and compromising state sway. "My answer is clearly no", he said.

But such efforts will be confined to private-sector settlements, he said, adding that the G20 did not discuss the idea of central banks issuing digital currencies.

Details: If the U.S. 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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