The G7 finance chiefs expressed their skepticism towards Facebook's attempt to issue a digital currency, as they consider that several regulatory problems should be solved before it could be launched. Several regulators, central banks and representatives have highlighted that the new coin should have good enough security standards for the transactions and should respect anti-money-laundering rules.
“The sovereignty of nations cannot be jeopardized,” said the French G7 representative, Bruno Le Maire, “The overall mood around the table was clearly one of the important concerns about the recent Libra announcements, and a shared view that action is needed urgently,” he added.
The German representative added that there are data security matters that need to be solved and that the project “seem to be fully thought through.”
“I am convinced that we must act quickly and that (Libra) cannot go ahead without all legal and regulatory questions being resolved,” said the German Finance minister.
Joining the criticism, Some central bankers claim that Facebook would need a banker license if it intends to take deposits from investors and from the public, which means they would need to abide by all the regulatory standards that govern the industry.
“Financial regulators are favorable toward innovation. But that cannot come to the detriment of the security of the consumer,” said the European Central bank representative.
The Japanese agreed, adding that countries must attempt a coordinated global response.
“If the Libra is aspiring to be used globally, countries must seek a globally coordinated response,” said the Bank of Japan Governor Haruhiko Kuroda
This casts doubts about the future of this cryptocurrency and brought to the table the concerns financial regulations have about an area that was traditionally controlled by the different states: the issuing of currencies.
“This is not something that can be discussed among G7 central banks alone,” added Kuroda.