“Facebook’s Libra cryptocurrency should be prevented”

German Finance Minister Olaf Scholz said Friday it has doubled its criticism of its plan to launch Libra cryptocurrency and should prevent the creation of a new world currency.

Scholz talked to reporters at the IMF and World Bank fall meeting in Washington, where he worried about these stablecoins and the potential international risks they raised. Mentioned that it is growing.

The German official said “very skeptical” about Facebook's plans. “We will carefully monitor the situation by all means. I am not in favor of the successful creation of such world currency. For that is the responsibility of the democratic state. ”

On Thursday, a group of seven wealthy countries announced a new digital report, arguing that such digital currencies should not be launched until the serious international risks they raised have been resolved.

The G7 Working Group said that digital coins, commonly supported by traditional currencies and other assets, could threaten the world's monetary system and financial stability. Emerging technologies are now mostly unregulated.

At the same time, Scholz said it was clear that certain changes were needed in the financial sector.

"Reform is needed," he said, pointing out that inter-border payments should be faster and cheaper, without compromising state autonomy.

On Thursday, a group of seven wealthy nations said that such “stable money” should not be fired until the serious international risks they face have been resolved.

The G7 Working Group, in its report to the Secretary of Finance gathered in Washington for the IMF and the World Bank, said that stable currencies (generally digital currencies backed by traditional currencies and other assets) in large currencies could threaten the world's monetary system and financial stability. Said. Fall meeting.

The report, like other cryptocurrencies at the moment, shows that emerging technologies with little regulation can hinder cross-border efforts to combat money laundering and terrorist financing and address cybersecurity, taxation and privacy issues.

"G7 believes that the global stake coin project should not begin until the legal, regulatory and oversight issues and risks are resolved," said Benoit Coeure, member of the European Central Bank Board of Directors, the Task Force.

The report said, “Private sector agencies designing stable coin contracts are expected to address various legal, regulatory and oversight challenges and risks.

The report highlights concerns among global policymakers about stable coins such as Libra and presents additional headaches for Facebook projects after a week of chasing.

In response, the Libra Association, which supports cryptocurrency efforts, says it is committed to working with regulators.

Libra was designed to respect the rules of state sovereignty over monetary policy and the rules on money laundering and other efforts to combat illegal finance, the statement said.

“Libra is designed to work with existing regulators so that they can be applied without disrupting or compromising the protection they provide to the digital world.

In a strict regulatory investigation, 21 companies sponsoring Libra have pledged to launch the project on Monday this month to prevent the dropping of a quarter of their original members, including the payment of huge visas and master cards.

Stablecoin and payment

In June, Facebook unveiled Libra, a stable coin form backed by currencies ranging from dollars to euros and government debt.

StableCoin aims to plague cryptocurrency and overcome extreme volatility unrealistic in commerce and payments.

But Libra received immediate and constant criticism. Policymakers have expressed concern about the potential to destabilize the global financial system and undermine national monetary policy control. Others have said that they may violate your privacy.

According to the G7 report, authorities said that existing rules on payment and anti-money laundering as well as capital market and banking standards should be applied to stable coins.

It also added that new rules may be needed to address emerging technologies with the Financial Stability Board, an institution established after the financial crisis in 2008. The relevant regulatory issues were assessed before being reported to a group of 20 wealthy countries in April.

Stablecoins failed to attract the attention of global policymakers because of Libra's small size. The biggest tether is the No.1 cryptocurrency, which is part of the bitcoin size.

According to Facebook, Libra is designed to address the inefficiencies of the global payment system, which is caused by high fees, long transfer times and lack of reliability.

This prevents and, in many cases, prevents cross-border payments, especially in developing countries.

G7 said central banks, finance ministries and other authorities should strive to address these weaknesses in the payment system. The public sector said it should step up efforts to attract people who do not have access to financial services to the financial system.

He added that central banks should review their digital currency issuance, both on their own and in cooperation.

Source: Reuters