Read all the G7's regulatory response to Libra

This week, G7 finance ministers from the United States, Britain, Germany, France, Japan, Italy and Canada convened a meeting, and Facebook’s just launched digital currency Libra became the topic of this G7 discussion. . During the two-day conference, they have reached consensus on several initiatives and rapid regulation of digital currency projects such as Libra and demanded the implementation of the highest financial regulatory standards. Next, let Planet Jun (O-daily) take everyone to see what resolutions Libra has made at this G7 finance ministers and central bank governors meeting.

Call for urgent action

The G7 finance ministers and central bank governors held a two-day meeting in Chantilly, northern Paris on July 17 and 18, France is the rotating presidency of this year, and other finance ministers also released after the meeting. Libra's resolutions are summarized and agreed to take action on the issues it raises.

The summary of the resolution mentions:

“G7 finance ministers and central bank governors acknowledge that while innovation in the financial sector can bring substantial benefits, it can also pose risks. Therefore, they agree that stable coins and other new products are currently being developed, including Projects such as Libra, which is global and systematic, can lead to serious regulations and systems, as well as broader policy issues that need to be addressed before such projects are implemented."

Regarding regulatory issues, G7 finance ministers and central bank governors agreed that they might adopt “more robust” regulatory measures and demand the implementation of the highest financial regulatory standards. France, the rotating presidency, wrote in the summary of the resolution:

“With regard to systemic issues, both G7 finance ministers and central bank governors believe that projects such as Libra may affect monetary sovereignty and the operation of the international monetary system.”

Above: G7 finance ministers and central bank governors meet in Chantilly, France.

French Finance Minister Bruno Le Maire (pictured below) revealed in an interview with Reuters:

“For Libra, we have had a very constructive and detailed discussion and reached a very big consensus on taking the necessary actions. National sovereignty cannot be compromised…. The overall mood of this meeting is that Libra needs urgent action. ""

German Finance Minister Olaf Scholz said that currency issuance is not a private company because it is a core issue for a sovereign country. He believes that Facebook's plan to launch digital currency does not seem to be fully considered, and it is believed that the project cannot continue without addressing all legal and regulatory issues.

A senior official of the Ministry of Finance of Japan told reporters during the G7 meeting:

“Most G7 members believe that Libra is a serious problem from the perspective of consumer data protection and monetary policy impact.”

Global Coordination and G7 Working Group

Facebook recently announced the Calibra Digital Wallet Program, which will serve as a subsidiary of Facebook to provide financial services to the Libra network, followed by a digital wallet that supports Libra.

In response to this series of changes, the G7 has established a Stabilization Coin Working Group, headed by Benoit Coeure, Chairman of the Committee on Payments and Market Infrastructures, whose members are mainly from the G7. Senior officials of the Central Bank, the International Monetary Fund (IMF), the Bank for International Settlements and the Financial Stability Board (FSB). According to a summary of the meeting issued by Benoit Coeure, the Stabilization Coordination Working Group will be followed by the Ministry of Finance and will also coordinate with the G20 and other relevant standards-setting bodies. In addition, the G7 Stabilization Coordination Working Group is expected to issue a final report and recommendations prior to the October International Money Bank-World Bank Annual Meeting.

Above: Benoit Coeure, Chairman of the Payment and Market Infrastructure Committee

Haruhiko Kuroda, governor of the Bank of Japan, believes that given the potential impact of Libra on the global economy, the G7 Stability Coordination Group will continue to evolve over time, including attracting more regulators to join, he elaborated. :

“If Libra is eager to use it around the world, then countries must actively engage in a coordinated global response… This is not a problem that the G7 central bank can discuss and solve separately.”

Central bank officials of the G7 also said that if Facebook wants to involve deposit business, then it must obtain a banking license, because anonymous transactions will always worry regulators.

Japan established its own encryption working group

According to Reuters, Japanese sources have revealed that they will set up a regulatory plan for Facebook's digital currency Libra, and they set up a working group in China to study Libra before the G7 finance ministers and central bank governors meeting. Potential impact on monetary policy and financial regulation. The working group is made up of officials from the Central Bank of Japan and the Japan Financial Services Agency (FSA), which is responsible for the regulation of the country's banks, and has begun a comprehensive discussion on all aspects of the stabilization of the currency.

According to Japan’s “Mainichi”, the current Japanese Finance Minister’s Minister Taro Aso said after the G7 meeting that the Japanese Digital Money Working Group will seek to coordinate policies to address Libra’s possible regulation, monetary policy, and taxation. And the impact of payment settlement, he explained:

“Given the fact that digital currencies may affect many aspects of the policy, Japan hopes to gain support from other countries and expand the membership of the working group to a larger tax and financial regulatory community.”

As the host country of the G20 summit this year, Japan will study how to coordinate the work between G7 and G20 to jointly assess and solve Libra's policy impact. At the G20 summit held last month, G20 leaders declared that crypto assets are not currently a threat to global financial stability, but they are closely watching developments and are wary of existing and emerging risks. . In addition, the leaders asked the Financial Stability Board (FSB) and other standards-setting bodies to respond to market needs.

Japan wants to build a global encrypted payment network

Reuters reasons informed sources, in order to combat money laundering activities, the Japanese government is establishing an international network of cryptocurrency payments, similar to the traditional interbank financial telecommunications association (SWIFT) network used by traditional banks. The Japanese Ministry of Finance and the Japan Financial Services Agency plan to complete the construction of this network in the next few years. As an intergovernmental standard-setting body in the field of anti-money laundering, the Financial Action Task Force (FATF) will oversee the development of the system, and they have actually approved Japan's plan to establish an international network of cryptocurrency payments in June this year.

Japanese Finance Minister Taro Aso urged other G7 peers to comprehensively assess the various regulatory issues that Libra may have. He said:

“Only assessing existing regulations may not be enough. A comprehensive review is needed to see if Libra may involve issues that are not considered by existing rules. On the other hand, regulators need to respond in a timely manner so that they do not fall behind these new ones. technology."

Will US lawmakers first "kill" Libra?

This week, Facebook cryptocurrency project leader, Calibra CEO David Marcus, appeared in front of the US Senate Banking Committee and the House Financial Services Committee to answer questions such as how Libra affects global monetary policy and how to protect customer data.

But the problem is that US legislators don't trust Facebook.

Senator Sherrod Brown bluntly stated in his opening remarks that Facebook is not worthy of trust after the data privacy scandal, and it is difficult for US legislators to give them a chance to experiment with people's bank accounts.

Rep. Brad Sherman’s attitude is more straightforward. He did not ask anything and explained directly:

"Nobody will call this Libra, people will call it ZuckBucks. So we need Zuckerberg to sit here, Libra is comparable to 9/11 in the United States, for drug dealers, evading sanctions and other criminals. Libra is definitely a godsend. American power comes from the US dollar, and the US dollar is even better than the US military. Libra can't solve the problem of cross-border remittances, and can't solve the problem of people without bank accounts. If Libra is used for terrorist attacks, 100 Lawyers can't keep Zuckerberg, he is waiting to accept the trial of the American people, I don't ask any questions."

Above: David Marcus, CEO of Calibra

Rep. Andy Barr hopes that Facebook can clarify that Libra will not undermine sovereign currency and central banks, nor will it provide greater freedom to move people away from central banks.

David Marcus's answer seems to be able to give a summary of this article, he said:

“I want to make a very clear explanation. We don’t want to compete with the US dollar or sovereign currency. And we won’t release the Libra digital currency until Facebook completely resolves regulatory issues and gets proper approval.”

This article comes from Bitcoin.com , the original author: Kevin Helm

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