The Group of Seven has brought Facebook’s Libra project under the spotlight once again, and to the social media giant’s horror, the news is certainly not welcoming.
“Facebook should not launch the global digital currency Libra until proper regulations are in place to handle the potential risks,” read the statement given by G7 on Thursday in an interaction. Facebook’s Libra stablecoin has been facing a lot of criticism since the news of its launch was broadcasted in the financial world. The regulatory authorities from around the world have been quite keenly scrutinizing the project because of the fear of security compromises.
Bruno Le Maire, the reputed Economy Minister of France, warned the crypto arena against Libra by saying that such projects are likely to hamper the ultimate control of the nations’ government on the exchange rates. Mr. Maire stated that “It’s a matter of democracy, not just a simple economic question.” He further added that there is a strong possibility that Facebook’s digital currency might enjoy an “immediate global reach” attributed to the huge membership community of the social media leader.
Le Maire conveyed the Group of Seven nation’s take on Libra cryptocurrency by saying that,“No global stablecoin project should begin operation until the legal, regulatory and oversight challenges and risks are adequately addressed,” keeping in mind the perspective of money laundering and terror financing.
He showed his concern for the loss of control over currencies by the sovereign government post the launch of Libra by saying that,
The key question is the question of sovereignty. Do we want a private company to have… the same power, and the same sovereignty, as democratic states.
Another report by Benoit Coeure, a board member of the European Central Bank, stated that it is an absolute prerequisite to constitute a framework for scrutinizing Libra. It further asked the regulatory authorities to channelize their work in coordination so that the issuers are restrained from getting access to the most promising country for kickstarting their operations.
Le Maire’s views were addressed as “legitimate concerns” by David Marcus, the digital currency head of Facebook. He stated that,
We’re determined to answer these concerns with real solutions that will meet or exceed the standards of the current system.
While Libra Association, the working manager for the Libra project, has always bragged about Libra being designed in a way that duly complies with the national sovereignty, the regulatory authorities fail to show trust on the highly controversial project till today.