Facebook's Libra gets stark warning from G-7 finance chiefs

Finance chiefs from the Group of Seven rich democracies issued a stark warning on Thursday that cryptocurrencies like Facebook's Libra should not be allowed before "serious regulatory and systemic concerns" are put in check.

France, which this year chairs the G-7 gatherings on topics ranging from the economy to security, said it is worried that what some call the "future of money" - encrypted digital currency - could spiral out of control.

France's concluding summary from this week's meeting said that the finance officials agreed that while cryptocurrencies could help make payments cheaper and more efficient around the world, they could also be used for money laundering and terrorism financing and could even endanger the stability of global currencies.

Host French Finance Minister Bruno Le Maire likened the creation of Libra to the development of a whole new state.

"We won't allow private states to emerge that would have the same privileges of a state but without the controls that go with it," Le Maire told reporters after the meeting in Chantilly, near Paris.

Facebook has proposed pegging Libra to existing currencies to make it more stable than the likes of Bitcoin and useable as a way to pay for things.

Governments around the world are rushing to assess how that would affect or destabilise the economy if, for instance, the cryptocurrency decides to weigh in favor of the dollar or the euro.

The officials agreed that cryptocurrencies like Libra will have to meet "the highest standards" of financial regulation before they can be implemented.

The statement conceded that there is a need for faster and cheaper international money transfers, and that governments could accelerate "ongoing public and private efforts to upgrade existing payment systems."
Yet he remained upbeat, maintaining that the process was moving "in the right direction," and that the main goal of the G-7's European members of France, Britain, Germany and Italy had been achieved: For the US to accept language that new tax rules need developing for "highly digitalized business models."