Facebook’s stablecoin Libra must have an established regulatory framework before it may launch, a G7 report, to be released this week, declares.
“The G7 continues to maintain that no global stablecoin project should begin operation until it adequately addresses relevant legal, regulatory, and oversight requirements through appropriate design and by adhering to applicable standards,” the report said.
There are now strong chances that Facebook’s Libra may not get required approvals from national legislators. A number of regulatory authorities, including those in France, Germany, Italy, Spain, the Netherlands, and the US have already issued warnings to this effect. In April, the G20’s Financial Stability Board issued a comprehensive stablecoin study, presenting ten recommendations to regulate them effectively.
Meanwhile, the G20, which brings together finance ministers and central bank governors representing the European Union and 19 countries across the world, released a report on Monday that it is working with the International Monetary Fund, the World Bank and the Bank for International Settlements to formalise the use of central bank digital currencies in banking systems.
According to the report, by the end of 2022, the G20 members, the IMF, the World Bank and the BIS will have completed regulatory stablecoin frameworks and research and selection of CBDC designs, technologies and experiments.
“The G20 will examine the scope for new multilateral platforms, global stablecoin arrangements and central bank digital currencies to address the challenges that cross-border payments face without compromising on minimum supervisory and regulatory standards to control risks to monetary and financial stability,” the G20 Financial Stability Board (FSB).
An ECB report said that a decision to issue a digital euro would be announced in April next year. Bank of Japan officials have said digital yen experiments are starting in the spring. China has forged ahead of the rest of the world in developing its digital yuan, and has already begun expansive trials.