Brussels (Brussels Morning) Representatives of central banks and finance ministers from the G7 stress the importance of regulating digital currencies, according to a US Department of the Treasury statement released yesterday, Monday, after the virtual G7 meeting, Reuters reports.
The Department of the Treasury notes that the finance officials talked about cryptocurrencies and other digital assets as well as efforts by national authorities to prevent the use of such assets for malevolent purposes and illegal activities. The G7 strongly supports the idea that digital currencies must be regulated, the statement said.
Besides discussing regulation and oversight of digital assets, participants at the G7 meeting discussed national and international economic responses to the coronavirus pandemic and ways to achieve a strong global recovery from the crisis.
After the meeting, Germany’s Minister of Finance Olaf Scholz criticised US tech giant Facebook’s cryptocurrency, recently renamed Diem from Libra, and said that neither Germany nor the EU should authorise its launch. It will take more than a new name for Facebook’s planned cryptocurrency to ease the concerns of regulators, he asserted.
“A wolf in sheep’s clothing is still a wolf,” Scholz warned, adding that Germany and the EU “cannot and will not accept its entry into the market while the regulatory risks are not adequately addressed.” It was essential that everything possible be done to prevent the currency monopoly from slipping out of the hands of states.
Earlier reactions and comments
In October, G7 officials stated their support for a joint statement on digital payments, noting that such payments could reduce inefficiencies and costs as well as improve access to financial services. However, they also stressed the importance of appropriate regulation and supervision.
After Facebook announced plans to launch its digital currency in June, regulators around the world warned it could jeopardise the global financial system.
New name, new hopeFacebook renamed its Libra hoping that the new name would offer a new opportunity to win over regulators who had rejected its launch and entry into the emerging market, Bloomberg reported earlier this month. Besides abandoning the old name, the project scrapped plans to transition to a permissionless blockchain, which would have turned away from transparency and openness, and towards centralized control.