G7 Creating Task Force For Facebook’s Libra To Regulate Cryptocurrencies
- France open to invitation but firm on regulation
- G7 that includes Canada, France, Japan, Italy, Germany, the UK, and the US to create a task force for Libra
- Within days of launching its Libra coin, Facebook has faced opposition from officials around the world. Now, France is creating a G7 task force to study how central banks can ensure that cryptocurrencies like Libra are governed by regulations. These regulations range from money laundering to consumer protection, revealed France’s central bank governor on Friday.
The said force would be led by Benoit Coeure, a European Central Bank board member, Governor Francois Villeroy de Galhau said.
As reported, Facebook announced its plan on Tuesday to introduce a new global cryptocurrency called Libra. It is joined by 28 partners to form Libra Association, a Switzerland-based non-profit entity that will govern the new digital coin, per the details released via the White paper. The company has also set up a subsidiary, Calibra.
The move came after France’s finance minister, Bruno Le Maire expressed his concerns about Libra on Tuesday.
“It is out of question’’ that Libra be allowed “become a sovereign currency,” Le Maire said at the time. “It can’t and it must not happen.”
Now today, Villeroy said France is “open to innovation” but firm on regulation which he says, “is in everyone’s interest.”
Global Regulators Expressing Concern About Facebook’s Libra
Facebook is drawing fast and worried reaction from authorities. Since unveiling the project, the US, Australia, and the UK have shown concerns about potential regulatory issues around Facebook’s Libra.
The US Senate Banking Committee has also scheduled a hearing on Facebook’s crypto plans on July 16. David Marcus, who oversees the blockchain efforts of the social media giant is expected to testify in this hearing.
France currently holds the rotating presidency of the Group of Seven nations, that is a group of advanced economies including Canada, France, Japan, Italy, Germany, the UK, and the US.
Markus Ferber, German Parliament member also called for scrutiny saying companies, “must not be allowed to operate in a regulatory nirvana when introducing virtual currencies.”
The concept of a “stable” cryptocurrency needs to be defined, said Villeroy, particularly what they are stable against and how fixed is their exchange rates.
The Governor also called for a network of national anti money laundering authorities that will be coordinated by the European Banking Authority in order to carry out emergency measures. This will work as a substitute for national authorities instead of creating a specialized European agency.