G7 countries to regulate and supervise crypto-currencies
Leading industrialised nations today expressed “strong support” for the “need to regulate digital currencies”, a spokesman for US Treasury Secretary Steven Mnuchin said today.
The finance ministers of the G7 countries – Canada, France, Germany, Italy, Japan, the UK and the US – and the heads of the International Monetary Fund, the World Bank and the Financial Stability Board met Bitcoin Superstar today to discuss the pandemic, finance and crypto-currency.
Crypto currencies to be regulated and supervised
The Secretary of Mnukhin said today that Ministers and Governors “reaffirmed their support for the G7 joint statement on digital payments of October”.
This statement, published on 13 October, stated that digital payment services “should be properly supervised and regulated to address the challenges and risks related to financial stability”.
Although the G7 said that digital payments – which they define as alternatives to Fiat payment systems (in other words, crypto-currencies) – have “the potential” to make payments more easily, quickly and cheaply accessible. However, it could also be dangerous if the risks are not addressed.
Above all, the G7 noted that it is the public sector that is used to controlling the money supply in order to ensure “the security and efficiency of payment systems, financial stability and the achievement of macroeconomic objectives”.
Crypto-currencies outside their jurisdiction (unless they are regulated) threaten G7 control.
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Private Stablecoins could be licensed
The G7 believes that all privately managed Stablecoins such as Tether or Diem (formerly Libra) should only be brought into service once they have “properly addressed” the concerns of regulators.
This assertion was made last year, when it took Facebook’s Libra project as an example.
Incidentally, the systemic risks that Stablecoins potentially pose to traditional financial systems were recently brought to the fore in the US with the introduction of the STABLE bill, which was co-funded by Congresswoman Rashida Tlaib.
The bill would force issuers of Stablecoins to obtain federal government approval – including the blessing of the Federal Reserve and the registration of a banking licence – before they can begin issuing Stablecoins.
While the G7 is also dealing with Stablecoins, it is, however, interested in government initiatives, such as central bank digital currencies, which it believes could help support central bank monetary policy. Indeed, all G7 countries have indicated that they are considering them.