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G7 has just recently released a report addressing a long list of concerns it has with global stablecoins like Libra.
French Finance Minister Bruno Le Maire said on Friday that Paris, Rome, and Berlin will join together in the effort of blocking Facebook’s new digital currency Libra in Europe.
This is not the first time Le Maire is showing his hate towards cryptocurrencies. Last month, when he spoke about Libra, he said that this kind of technology, developed by the social media giant “causes serious concerns and therefore its operation cannot be authorized for use on European soil.”
He added that the Libra project could pose financial risks for the EU, including the risk to the “sovereignty of other nations’ currencies, and has the potential for abuse of market dominance.”
This all was supported by the biggest European economy Germany whose officials stressed that “no private entity can claim monetary power, which is inherent to the sovereignty of nations.”
Be it as it may, we shouldn’t be surprised this kind of thing happen. Since they’ve born, cryptocurrencies are exposed to constant hate, disbelief and skepticism.
“Cryptocurrencies, including Bitcoin, have so far failed to provide a reliable and attractive means of payment or store of value,” reads the latest report from the Group of Seven (G7) nations
France, USA, Japan, Canada, Italy, Germany, and the U.K. decided therefore to publish a final report on stablecoins on Thursday. European Central Bank board member Benoit Coeure who guides G7 said:
“The G7 believes that no global stablecoin project should begin operation until the legal, regulatory and oversight challenges and risks are addressed, the task force. Private sector entities that design stablecoin arrangements are expected to address a wide array of legal, regulatory and oversight challenges and risks.”
Furthermore, in the report we can read all about cryptocurrencies being not a solution, being “highly volatile,” having scalability limits, complicated user interfaces, and issues in governance and regulation, among other challenges.
And then there is a “beautifully” made sentence that says:
“Thus, cryptoassets have served more as a highly speculative asset class for certain investors and those engaged in illicit activities rather than as a means to make payments.”
Ok, let’s get serious now. We see what’s it all about. When Coeure screamed that virtual currencies like Libra “could challenge the supremacy of the U.S. dollar,” (even though both David Marcus and Mark Zuckerberg said they do NOT want it), it was immediately clear that this whining was only echoing concerns from President Donald Trump, who already said Libra would have “little standing or dependability” and that the “only one real currency” is the dollar (so is euro, Donald, so is yen, so is pound etc, etc).
It’s really easy to realize that regulators are just afraid that dollar could lose up to Libra because Facebook is more influential then the US government (and accepted in more parts of the world as well), with more than 2.4 billion monthly active users as of July 2019.
However, similar to Trump is already mentioned Le Maire who is obviously afraid that Libra would diminish his role as a euro-representative.
On the other hand – not everything is so black. The Bank of England’s Mark Carney has proposed a digital reserve currency and two days ago he explained that the “main role of central banks in the development of fintech would be to remove impediments to different parties, ensuring a level playing field so good ideas aren’t excluded.”