As per a draft report by Group of Seven {G7} Nations, which represents the UK, Japan, German, France, Italy, the US, and Canada, no more implementation of any Stablecoin project until crypto experts prove its security. Addressed in their report was Facebook’s Libra cryptocurrency, which is still under its early invention.
The BBC reported on Monday that the Group confirmed that there would be no implementation or operation of any Stablecoin project till all the oversight, legal, and regulatory challenges are adequately addressed and the right measures put in place for safe operation.
The draft highlighted that getting all the issues addressed is not a guarantee that any of the Stablecoin projects will obtain regulatory approval to go ahead with its operations.
Soon after the announcement of Libra by Facebook in June 2019, G7 came up with a group of specialists to address issues with Stablecoin projects. The draft report, which will be given to the finance ministers during the International Monetary Fund annual meetings before the end of this week, indicates clearly that global stablecoins capable of potentially scaling briskly pose tons of regulatory challenges. Facebook’s Libra is not only the stable coin to be examined as JPMorgan’s dollar-backed stablecoin known as JPM coin is also listed among the stable coins needing investigations.
Based on a report by the Financial Stability Board {FSB}, which organizes the G20 nation’s rules, it’s vividlyclear that stablecoin projects trigger a whole lot of challenges to the financial, compliance, and stability, data protection, and privacy, investor protection, and lots more. Randal Quarles, the Financial Stability Board’s chairman in his letter to G20 finance ministers issued on Sunday,said that all the challenges must be appropriately assessed and tactically addressed before any stable coin project is given the go-ahead to start its operations.
Delay of the Launch
The FBS has partnered with other international stakeholders to help come up with suitable regulatory gaps and aims to issue a report the coming summer. Facebook has officially released a statement claiming that the regulatory scrutiny will likely move Libra’s launch date further.
Conclusion
This is yet another blow to Libra besides the many other blows it has suffered in the past. First, it was Visa, eBay, MasterCard, and stripe who withdrew their support for this project. Just last week, PayPal also announced its official withdrawal from the project. G7 officials have already confirmed that cryptocurrencyis the way to ensure cheap and fast movement of money. They also claim that the current version of Cryptocurrency news system is a bit slow, expensive, and unreliable, and owing to the massive number of customers who can benefit from the introduction of Libra and other cryptocurrencies, coming up with regulatory gaps soon is vital. Facebook executive thinks that the withdrawal by the big supporters is not as bad as some may think as he terms it as liberating. Being forced to wait for verifications and scrutiny is not only delaying the launch of Libra but also adding to the many blows the cryptocurrency has suffered previously.