The world of cryptocurrencies has always been given the side-eye by traditional institutions and as the years have progressed the sentiment has more or less remained the same. Despite efforts by multiple cryptocurrency organizations, policymakers have increased their scrutiny over the industry.
According to the latest reports, a gathering of G7 nations has decided to halt the launch of Facebook’s Libra cryptocurrency until and unless it meets regulatory standards. The group believed that Facebook’s track record over the past few years has been shoddy and they would not let Libra just walk in without any supervision.
The G7 meeting included members from the United States, Canada, Japan, Germany, France, Italy and Britain. This cluster of finance ministers and central banks were also of the opinion that digital currencies and payment methods could be the way to make transactions cheaper and much more seamless. One of the biggest tasks to be undertaken by the new venture is to cut out the middleman and protect the customer firsthand.
Despite stating the positives, the G7 believed that if digital assets were left unsupervised, it would lead to calamitous results. A draft from the committee read:
“The G7 continues to maintain that no global stablecoin project should begin operation until it adequately addresses relevant legal, regulatory, and oversight requirements through appropriate design and by adhering to applicable standards.”
The G7 claimed that the unfettered use of cryptocurrencies could lead to issues such as money laundering, terrorist and proliferation financing, and even undermine legal certainty. Facebook’s Libra has come under the scanner multiple times for flouting country standards and also because of its parent company’s reputation. Libra was not the only topic of discussion as the G7 also realized that several countries were testing out their own centrally backed cryptocurrencies.
Member nations had also proposed a list of 10 recommendations back in April which covered the topics of regulating stablecoins. This list plays a crucial role at a time when even organizations like the European Central bank was planning to trademark the term ‘digital euro’. The body reiterated that all discussions surrounding digital assets should also account for the risks associated with it. Major scams have shaken up the industry multiple times before and a tight grasp on policies may be the only way to take the industry mainstream.