G7 Central Bankers Stress the Need to Regulate Cryptocurrencies at Latest Meeting

The G7 finance ministers and central bank governors discussed the need to regulate cryptocurrencies during their latest meeting. German Finance Minister Olaf Scholz raised concerns about Facebook’s upcoming cryptocurrency.

G7 Sees the Need to Regulate Crypto

U.S. Treasury Secretary Steven Mnuchin hosted a discussion on Monday with finance ministers and central bank governors from Canada, France, Germany, Italy, Japan, the U.K., the European Commission, and the Eurogroup. The meeting was also attended by the heads of the International Monetary Fund (IMF), the World Bank, and the Financial Stability Board (FSB).

Besides discussing responses to the Covid-19 pandemic and economic recovery measures, the G7 finance ministers and central bank governors “also 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,” the Treasury Department detailed, adding:

There is strong support across the G7 on the need to regulate digital currencies.

“Ministers and Governors reiterated support for the G7 joint statement on digital payments issued in October,” the Treasury Department continued.

The G7 countries are in varying stages of implementing cryptocurrency regulation, revising existing laws, and providing more clarity to investors and companies in the space. For example, in the U.S., the top banking regulator recently revealed that new cryptocurrency regulatory measures will be introduced in a matter of weeks that will “work for everybody.” Germany began regulating the crypto industry in January and has been constantly clarifying its rules ever since. Japan, which started regulating the crypto industry back in 2017, has also been revising and adding to its rules.

Concerns Over Facebook-backed Cryptocurrency

After the meeting on Monday, German Finance Minister Olaf Scholz issued a statement, raising concerns about authorizing the launch of Facebook’s libra cryptocurrency, which has been renamed diem, in Germany and Europe. He warned:

A wolf in sheep’s clothing is still a wolf. 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. We must do everything possible to make sure the currency monopoly remains in the hands of states.

Scholz has long been concerned about the impact of Facebook’s libra/diem. Recently, the president of the European Central Bank (ECB), Christine Lagarde, downplayed bitcoin’s risk to financial stability but voiced concerns about global stablecoins, like the Facebook-backed cryptocurrency.

The Libra Association, now called the Diem Association, said last month that the Facebook-backed cryptocurrency could launch as soon as January as a single USD stablecoin.

What do you think about the G7 wanting to regulate crypto? Let us know in the comments section below.

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