G7 finance minister and central bank governor reached a consensus: digital currency needs the strictest supervision

The G7 believes that the savvy of the technology giants on digital currencies will also weaken the country's control over currency and banking policies, and it will also pose security risks.

“In any case, the possible 'stabilized currency' program and its operators need to meet the highest standards of financial regulation, especially in anti-money laundering/terrorist financing, to ensure that they do not affect the stability of the financial system or consumers. Protection.” On the 18th, local time, the Group of Seven (G7) finance ministers and central bank governors reached an important consensus in their summary report.

The G7 Task Force, established by ECB Executive Committee member Benoit Coeure, presented Libra's investigation report to the meeting, opposing private companies with the same privileges as the state in creating payment methods without supervision.

He also said that Libra's similar stable currency has merits. The development company needs to further cooperate with the public and the authorities in the future. The G7 working group is also willing to continue to coordinate with the G7 Ministry of Finance, relevant standards-setting bodies and the G20. .

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In addition, the G7 countries confirmed for the first time that they should reach a consensus on the issue of taxing large multinational corporations. They agreed to introduce a minimum tax rate to prevent countries from “race to lower” the taxation level to attract technology giants to enter.

Digital currency needs the strictest supervision

Since Facebook announced on June 18 that its digital currency, Libra, will expand beyond social networks and move to e-commerce and global payments, governments are beginning to worry that large technology companies are violating government mandates, such as issuing currency.

At the meeting, the G7 believes that the savvy of the technology giants on the digital currency will bring security risks in addition to weakening the state's control over currency and banking policies. French Finance Minister Bruno Le Maire said sternly: "We cannot accept private companies issuing their own money without democratic control."

At the meeting, Cole said that digital currency opportunities such as Libra coexisted with risk, and they believed that they could help the poor who could not afford financial services, but they also needed strict supervision to ensure their stability and security, and did not encourage criminal activities.

“Global Stabilization Coins for retail purposes can provide faster, cheaper remittances, stimulate payment competition, thereby reducing costs and supporting greater financial inclusion.” Cole said, “but they bring a lot to the public. Risks associated with policy priorities, including anti-money laundering and combating financial terrorism, consumer and data protection, fair competition, and tax compliance."

Therefore, Cole said that stable coins need to comply with “the highest regulatory standards and are subject to prudent supervision and supervision”.

He said that it is necessary to further cooperate with digital currency developers and expand supervision in the future. “Developers need to be more involved in working with the public and the authorities… The working group is ready to work with the G7 Treasury, relevant standards development bodies and the G20 to advance its work,” he said.

Agree on the minimum level of corporate tax

At the same time, G7 also agreed that the technology giant should be treated more reasonably on the issue of taxation, changing the status quo of large multinational companies to reduce their tax obligations by registering in preferential tax countries. At the same time, countries should negotiate a common minimum tax rate to further ensure fairness.

The meeting concluded: "Considering that the current international tax framework needs improvement without destroying its principles, the finance ministers agree that there is a need to urgently address the tax challenges brought about by economic digitization and the shortcomings of the current transfer pricing system. Therefore, G7 ministers Fully support the work plan endorsed by the G20 leaders and adopt a two-pillar solution by 2020."

Under the first pillar, countries will develop new rules to address new highly digital business models, allowing companies to conduct business in one region without any physical presence, while strengthening tax certainty.

Under the second pillar, it is concluded that “the minimum level of effective taxation, such as the US Global Intangible Low Tax Income System (GILTI), helps ensure that companies pay their fair tax share.”

However, the meeting did not reach an agreement on the specific tax rate. The G7 looks forward to further progress in the context of the G20 and to reach a global agreement on the inclusive framework of tax-based erosion and profit transfer (BEPS) by January 2020.

Lemer said: "This is a real improvement in fair taxation in the 21st century."

Source: Sina Finance

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