Facebook is planning to launch its Libra project next year. However, the social media powerhouse faces a battle with the G7.
The Group of Seven powerful nations feels that Facebook’s ‘stablecoins’ pose international risks. Therefore, the institution has asked the technology company to address their concerns before launching.
The group consists of the United States, the United Kingdom, Canada, Japan, France, Germany, and Italy. The European Union also has firm backing within the group. As a unit, they are worried that a mass launch of this digital currency could threaten the global monetary system. This could have an adverse impact on financial stability in an already delicate economy.
According to Reuters, the group shared their report to finance ministers at its International Monetary Fund and World Bank meetings in Washington. The document adds that like other cryptocurrencies, the unregulated system could damage cross-border battles against money laundering, terrorism, and crime financing. Subsequently. the institution feels that this could increase issues for international cybersecurity, taxation, and privacy.
This isn’t the first time that Facebook has had to face influential panels over public concerns. Last year, founder Mark Zuckerberg was in the spotlight at a hearing in Washington over privacy regulation. Facebook had survived the grilling and will be prepared to stand its case heading into 2020. However, the G7 will try its best to make sure the firm puts the right measures in place.
“The G7 believes that no global stablecoin project should begin operation until the legal, regulatory and oversight challenges and risks are addressed,” stated the G7 task force, as reported by Reuters.
“Private sector entities that design stablecoin arrangements are expected to address a wide array of legal, regulatory and oversight challenges and risks,” the group added.
Facebook and Libra have countered these concerns by affirming that they adhere to global regulatory standards. They claim that they will continue to work with regulators to make sure everyone is on the same page.
Libra’s stablecoins uses existing currencies and government debt in an attempt to draw cryptocurrencies into banking and corporate establishments. Ultimately, stablecoins aim to overcome the volatile nature of currencies.
“Libra is being designed to work with existing regulatory institutions and apply the protections they provide to the digital world – not disrupt, or undermine, them,” a Libra statement read as reported by Reuters.
Altogether, Libra claims that it wants to reach the 1.7 billion people that currently don’t have access to a financial institution or mobile money. By introducing Libra, the brand wants to connect with the 31% of the world’s population that remain without a bank.
Do you think that Facebook’s Libra project will disturb the global economy and security? Let us know your thoughts in the comment section