Finance ministers and central bankers from the Group of Seven (G7) advanced economies strongly supported the need to regulate digital currencies, the US Treasury Department said in a statement on Monday after a virtual meeting of the officials.
German Finance Minister Olaf Scholz issued a sharply worded statement after the meeting, underscoring his concerns about authorizing the launch of Facebook’s Libra cryptocurrency - newly renamed Diem - in Germany and Europe.
“A wolf in sheep’s clothing is still a wolf,” he said. “It is clear to me that Germany and Europe cannot and will not accept its entry into the market while the regulatory risks are not adequately addressed.”
He added: “We must do everything possible to make sure the currency monopoly remains in the hands of states.”
The long-awaited Facebook-led digital currency Libra is preparing to launch as early as January, the "Financial Times" reported quoting three people involved in the initiative, but in an even more limited format than its already downgraded vision.
The 27-strong Libra Association said in April that it had planned to launch digital versions of several currencies, plus a “digital composite” of all of its coins. This followed concerns from regulators over its initial plan to create one synthetic coin backed by a basket of currencies.
However, the association would now initially just launch a single coin backed one-for-one by the dollar, one of the people said. The other currencies and the composite would be rolled out at a later point, the person added.
Libra’s exact launch date would depend on when the project receives approval to operate as a payments service from the Swiss Financial Market Supervisory Authority, but could come as early as January, the three people told the "Financial Times".
US Treasury Secretary Steven Mnuchin hosted the 12th meeting of the G7 finance officials this year related to the COVID-19 pandemic as Washington prepares to hand over the presidency of the G7 to Britain next month.
The G7 finance officials discussed ongoing responses to “the evolving landscape of crypto assets and other digital assets and national authorities’ work to prevent their use for malign purposes and illicit activities,” Treasury said.
“There is strong support across the G7 on the need to regulate digital currencies,” the statement said.
The G7 officials reiterated their support for a G7 joint statement on digital payment in October, which said digital payments could improve access to financial services and cut inefficiencies and costs, but should be “appropriately supervised and regulated.”
Stablecoins are tied to a traditional currency or basket of assets, and used for payments or for storing value.
G7 finance officials also discussed domestic and international economic responses to the COVID-19 pandemic, and strategies to achieve a robust global recovery, the statement said.
