Some of the world’s biggest economies believe Facebook’s cryptocurrency Libra should not be launched until its potential risks as “adequately addressed.” This was revealed by a report from the Group of Seven Nations (G7).
The report, reportedly seen by the BBC, outlines major risks posed by cryptocurrencies like Libra, and notes its backers must be legally sound, protect consumers, and make sure the cryptocurrency is not used to fund terrorism or launder money.
According to BBC the report did not single out Libra, but refers to “global stablecoins” with the potential to “scale rapidly.”
The report, which is set to be presented to finance ministers at the IMF annual meeting, reads:
The G7 believe that no stablecoin project should begin operation until the legal, regulatory and oversight challenges and risks are adequately addressed
The document also added that even if the Libra Association manages to mitigate the risks listed in it, this still doesn’t guarantee “regulatory approval for a stablecoin arrangement.” JP Morgan’s JPM stablecoin is reportedly also going to be examined.
In another document the Financial Stability Board (FSB), which coordinates rules for G20, noted stablecoins like Libra pose various challenges to financial stability and investor protection.
David Marcus, Facebook’s executive leading the stablecoin project, reacted to the news by tweeting:
“I would caution against reading the fate of Libra into this update. Of course, it’s not great news in the short term, but in a way it’s liberating. Stay tuned for more very soon. Change of this magnitude is hard. You know you’re on to something when so much pressure builds up.”