On the heels of the Facebook announcement of Libra the Bank of England indicated support as long as Libra is regulated. Now France is establishing a G7 task force to study how cryptocurrencies should be regulated:
“France is creating a G7 task force to study how central banks ensure cryptocurrencies like Facebook’s ( FB ) Libra are governed by regulations ranging from money-laundering laws to consumer-protection rules, France’s central bank governor said on Friday.
Governor Francois Villeroy de Galhau said the task force would be led by Benoit Coeure, a European Central Bank board member.”
The article describes the announcement of Libra by Facebook and then provides reactions from across the globe, most of which we have already published:
“Facebook’s announcement drew a fast, worried reaction. The U.S. Senate Banking Committee said it would hold a hearing on the plans next month. David Marcus, who oversees Facebook’s blockchain efforts, is expected to testify, according to a source in Washington familiar with the matter.
Bank of England Governor Mark Carney said Libra had to be safe or it would not happen, and that the world’s major central banks would need to have oversight.
France, which holds the rotating presidency of the Group of Seven nations, has said it does not oppose Facebook’s creating an instrument for financial transactions. But it adamantly opposes that instrument becoming a sovereign currency.
“We want to combine being open to innovation with firmness on regulation. This is in everyone’s interest,” Villeroy told finance industry officials.
The concept of a “stable” cryptocurrency still needs to be defined, Villeroy said. In particular, what such instruments are stable against and how fixed their exchange rates are need to be determined.
Villeroy also called for a network of national anti-money-laundering authorities, coordinated by the European Banking Authority, to carry out emergency measures and even substitute for national authorities, rather than creating a specializd European agency.
Several ECB officials, including Coeure, have argued in favor of creating such an agency over the past months.”
The takeaway from these early reactions is that should a global consensus (pun intended) be reached regarding the regulations that apply to cryptocurrencies, then the ability to deploy crypto widely is greatly improved. However, it is almost certain that the result will not reflect the desire of crypto enthusiasts for an environment where value can be moved anonymously.
Overview by Tim Sloane, VP, Payments Innovation at Mercator Advisory Group
