International stablecoins are a threat to the worldwide financial system. Or at least, that’s according to the G7 group of nations which has just drafted a report saying such.
Yesterday, the BBC reported that a draft has been typed up which outlines the numerous risks in regards to cryptocurrency. Furthermore, it says that even if a member company of the governing Libra Association addressed regulatory worries in that it might not even see a green light from the needed lawmakers. It states:
“The G7 believe that no stablecoin project should begin operation until the legal, regulatory and oversight challenges and risks are adequately addressed. […] Addressing such risks is not necessarily a guarantee of regulatory approval for a stablecoin arrangement.”
The G7 goes onto state that international stablecoins have the potential to scale every quickly which could see them ruin the competition and threaten financial stability if users were to lose their faith in a coin.
On top of this, the report is supposedly going to be presented to finance ministers at the yearly meeting of the International Monetary Fund this week.
The BBC went onto say that even though the report does not single out Facebook’s upcoming stablecoin specifically, it could see further issues for the already slated cryptocurrency.
In fact, the social networks CEO, Mark Zuckerberg is set to testify before the United States House of Representatives Financial Services Committee in regards to the stable coin later in October. The Committees head, Democratic Representative Maxine Waters is a well-known sceptic on the project so this could make for an interesting conversation. In fact, a few months ago the committee drafted the “Keep Big Tech out of Finance Act.”
There have been many big firms that have got on board with Libra over the past few months but it seems that they might be fleeing form the project as PayPal recently withdrew from the network. It didn’t take long for Visa and Mastercard to follow suit either.
It will be interesting to see how this situation plays out. For more news on this and other crypto updates, keep it with CryptoDaily!