Earlier this week, G7 leaders discussed regulatory responses to the development of cryptocurrencies and stablecoins.

The meeting brought together G7 central bank governors and heads of the Financial Stability Board, IMF and World Bank.

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A necessary regulation

Participants discussed responses to the ever-changing cryptocurrency landscape as well as government efforts to curb their use for illegal purposes.

We can read in the summary of the meeting: “ There is strong support within the G7 for the need to regulate cryptocurrencies. »

The announcement of Facebook's Libra Association renaming immediately had a big impact on the world stage. Regulators and governments around the world are rushing to pass appropriate regulations ahead of its launch.

After the meeting, German Finance Minister Olaf Sholz said of the name change: “ A wolf in sheep's clothing is still a wolf. It is clear to me that Germany and Europe cannot and will not accept its entry into the market until the regulatory risks are sufficiently taken into account. »

Finally, he explained that Europe must do everything to ensure that the currency monopoly remains in the hands of the States.

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Stablecoins in the crosshairs

The G7 also discussed ways to prevent the use of cryptocurrencies for illegal purposes, reaffirming its statements from October. These statements acknowledged the positive potential of digital payments, but warned that no global stablecoins should be issued until regulations are in place.

The G7 has long warned of the risks associated with cryptocurrencies. The European Union has already published a report in 2019 on the systemic risks associated with stablecoins such as money laundering.

This G7 meeting comes shortly after a new US bill to regulate stablecoins. The bill dubbed “STABLE” seeks to change current legislation and would require issuers of “stablecoins” to be regulated like banks.

When announcing the bill, a member of Congress specifically mentioned Facebook's Diem and other stablecoin proposals from JP Morgan, Apple, and PayPal.