G7 Says ‘Global Stablecoins’ Are A Threat To Financial Stability

The G7 group of nations has reportedly drafted a report which states that “global stablecoins” pose a major threat to the global financial system.
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As the crypto news today show, the (Group Of Seven) G7 says that there are many risks associated with digital currencies, according to reports by BBC on October 13.

The report also said that even if member firms of the governing Libra Association addressed regulatory concerns, it may not get approval from the necessary regulators. The full report in which G7 says this shows the following:

“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 also says that global stablecoins with the potential to scale rapidly are the ones that could stir up the competition and threaten the financial stability if users lose confidence in the coin. The report will purportedly be presented to finance ministers at an annual meeting of the International Monetary Fund this week.

The BBC features that G7 says that while the report does not single out Facebook’s Libra stablecoin project – it could spell further trouble for the already beleaguered proposed payments system, the Libra news show.

On the other hand, we have global regulators that are increasingly leaning on the project. The Bank of England (BoE) recently established provisions with which it must comply before it can be issued in the United Kingdom.

The CEO of Facebook, Mark Zuckerberg, will testify before the United States House of Representatives Financial Services Committee about Libra this month. Earlier this year, the committee drafted its “Keep Big Tech out of Finance Act.”

While G7 says that stablecoins like Libra are a threat to the financial system, it seems like the backers behind Libra are on the same page. If you followed our previous news, you probably know that on October 4, the major payments network PayPal withdrew from the organization – later followed by Visa, Mastercard, Stripe and eBay.

Furthermore, we saw Finco Services of Delaware initiating a lawsuit against Facebook and alleging trademark infringement, unfair competition, and “false designation of origin” regarding the use of the Libra logo.