Libra responds to G7 full text: Improving opportunities for cross-border payments

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The Libra Association welcomes dialogue with the G7 Working Group and accepts its review. The G7 report highlights a framework that enables Libra to function effectively, an ever-evolving vision. We hope to have the opportunity to continue to participate and expect policymakers to give regulators time and space to continue to develop appropriate regulations.

The Libra Association is pleased that the G7 Working Group has published the Investigating the Impact of Global Stablecoins report, which shows that they have realized that there is great potential for fast, secure and low-cost payment technologies.

The Libra Association is committed to building a system designed to replace or even surpass current consumer protection, financial stability and global cooperation standards to prevent money laundering while maintaining national sovereignty over monetary policy. Libra's distributed governance is designed to give consumers more choices, more access, higher interoperability and lower prices.

  • Libra Libra is committed to working with regulators to provide strong legal protection like legal currency.
  • Libra is designed to respect the country’s monetary sovereignty over the digital currency industry, rather than undermining national monetary sovereignty.
  • Libra aims to comply with and promote global anti-money laundering (AML), understand your customers (KYC) and protect against illegal financing.
  • Considering the stability of the global financial system and the importance of the state's sovereignty over monetary policy, Libra aims to work with existing regulators and apply the protection it provides to the digital realm, rather than subverting or undermining financial system issues and structural currencies. sovereignty.

In response to the G7 report, the Libra Association and its members hope to address some of the issues in the focus area:

Stabilizing the global trend of coins

The Libra Association was formed to help more people realize the long-term potential of Internet technology, help billions of people improve financial services, and reduce the cost of access to services.

  • The G7 report affirms that stable currencies such as Libra are the future of digital currency innovation because they eliminate currency volatility and increase payment security, speed and reliability. Libra can coexist with the national digital currency issued by the central bank, and China has successfully innovated in this area through a dedicated mobile network.

Fair competition and market integrity

The Libra network is open, allowing service providers running on the system to compete with each other.

  • We hope that the open source nature of the Libra project will motivate startups, institutions, financial technology developers and financial services companies in the Libra blockchain to form a global ecosystem and engage in responsible innovation. Banks, financial institutions and startups can use Libra for free, and can apply to join the Libra Association. By partnering with banks and responsible financial institutions, Libra can provide financial services to those who do not have a bank account.

Anti-money laundering, "know your customer" compliance, and taxation

The Libra Association agrees that the G7 Working Group prioritizes anti-money laundering, "know your customer" compliance, and taxation issues. We reiterate that the Libra Association will set appropriate anti-money laundering, "know your customers" and anti-fraud for members of the association. Standards to ensure that regulators and public stakeholders are assured.

  • The Libra Association has repeatedly stated that it will set standards for member institutions to safeguard anti-money laundering / "know your customers" and anti-fraud requirements, and to combat terrorist financing and other forms of entry into crime, Libra Association will also cooperate with law enforcement investigations. In addition, Libra has realized that many checks for illegal activities will be done on the service provider side as appropriate, so that historical transactions on the Libra blockchain can be analyzed and potential suspicious activity information can be shared with law enforcement agencies. Individuals and entities holding Libra tokens will be responsible for filing tax returns under local law, and we hope that Libra blockchain wallets and financial services will provide consumers with the tools to manage tax returns.

Consumer Rights

Libra token holders will enjoy protection and legal rights similar to current financial product protection and legal rights.

  • Although Libra does not give people the legal right to purchase tokens from the Libra Association, authorized resellers will have such contractual rights. By supporting competitive markets, authorized resellers will enable consumers to effectively switch between Libra and other currencies.

Financial stability, systemic risk and cybersecurity

Libra payment systems and Libra tokens are not designed to replace the dollar or any other currency, but to extend the function of these currencies by making cheap and fast payments. Libra does not undermine the government's sovereignty over monetary policy.

  • Libra has no intention of changing the role and influence of the central bank in the global financial system. Wallets and other financial services (including exchanges and other upper and lower ramps) running on the Libra network will have to comply with regulations, such as local capital controls, which in turn will allow the central bank to make adequate adjustments to prevent large amounts of domestic currency in emerging markets. Exchange into Libra tokens. The fiat currency in the Libra reserve will be subject to the monetary policy of the respective government. Each Libra token will be fully supported in the form of bank deposits and cash equivalents, as well as short-term government securities, which will mitigate the risk of “bank runs” because Libra tokens are supported entirely by one-on-one cash and other liquid assets, rather than a small portion of the reserve like a bank deposit. The Libra Association will also build strong network security requirements for node operators and implement protocols designed to ensure that the network is functioning properly, even if some of the certifier nodes are compromised, leaving the network unaffected and ensuring the flexibility of the payment network.

Data privacy and portability

The Libra Association is committed to protecting users' data privacy and will ensure that data protection laws, including GDPR, are applied to Libra activities.

  • Only the public wallet address and the number of transferred Libra tokens are collected, stored and processed on the Libra blockchain. Members of the Libra Association who are node certifiers will not be able to access, use or share personal data about Libra blockchain end users. Companies that interact directly with customers, such as wallet services and exchanges, will comply with data protection laws, including data portability.

Private payment network and governance

Unlike some other payment networks, Libra will operate transparently and work with regulators.

  • Through collaboration with the public and private sectors, the Libra Association has developed many of the latest technology infrastructure systems, including the Internet itself and its domain name system. The Libra Association looks forward to working with public institutions such as the Central Bank to build systems.

Improve opportunities for cross-border payments

The Libra Association is committed to expanding the financial inclusion of billions of people and small businesses, enhancing their economic capabilities and helping them access the global economic arena.

  • As can be seen in the G7 report, they have realized that cross-border payments and remittances are slow, cumbersome, and costly, especially for those who do not have bank accounts and consumers in underserved areas of the financial system. There is a great opportunity for the public and private sectors to collaborate to reduce the huge frictions in cross-border payments by leveraging digitally innovative payment solutions and, more importantly, these innovations have revolutionized other areas of economic activity.

The Libra Association welcomes dialogue with the G7 Working Group and accepts its review. The G7 report highlights a framework that enables Libra to function effectively, an ever-evolving vision. We hope to have the opportunity to continue to participate and expect policymakers to give regulators time and space to continue to develop appropriate regulations.