G7 Finance Leaders: Libra Must Resolve Regulatory Issues

Group of Seven (G7) finance leaders said on Wednesday (July 17) that there were numerous issues that needed to be worked out, regulatory and otherwise, in order for Facebook’s proposed cryptocurrency Libra to ever be viable.

Reuters reported there are also concerns about how large tech companies are moving in on territory previously only held by sovereign governments, and the potential consequences of that.

“We cannot accept having any exchange currencies with the same kind of power and the same kind of role as sovereign currencies,” said French Finance Minister Bruno Le Maire.

German Finance Minister Olaf Scholz said he doesn’t think Facebook’s actions with Libra “seem to be fully thought through,” and that data privacy concerns were going to be an issue.

“I am convinced that we must act quickly and that (Libra) cannot go ahead without all legal and regulatory questions being resolved,” Scholz said.

European Central Bank executive board member Benoit Coeure has been asked to set up a G7 task force to investigate Libra and other cryptocurrencies.

Banking officials have said that Facebook would need to be strictly regulated in order to take deposits, and that it would need a banking license as well. Others state that anonymous transactions should not be permitted, and that at least basic customer information should be required to complete transactions.

Bank of Japan Governor Haruhiko Kuroda said the G7 task force would evolve as needed in terms of dealing with Libra and its potential effect on the worldwide economy.

“If Libra is aspiring to be used globally, countries must seek a globally coordinated response,” Kuroda said. “This is not something that can be discussed among G7 central banks alone.”

The finance chiefs also discussed the issue of international tax rules in regard to huge tech companies like Apple and Google, which operate in low-tax countries regardless of income.