Facebook’s Libra suffers another blow: G7 report
|- G7 report says that clearing regulatory concerns is no guarantee for getting approval.
- Libra project continues to suffer under the regulatory blowback in both the US and Europe.
Facebook struggles to get Libra approved just got a lot harder following a recent report by the G7 group. The report outlines that Libra poses a great risk to the global financial system. The report says that even if the members of the Libra Association clear the regulatory concerns regarding the project, it will not be a ground for being granted approval by the regulators.
"The G7 believes 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 report says that stablecoins that portray a potential for scaling are likely to suppress competition. Moreover, in the event users lose confidence in the stablecoin, it could result in financial instability. The new report will be presented for discussion with the finance ministers during the annual meeting of the International Monetary Fund scheduled to take place next week.
The G7 report comes barely week since some of Libra backers exited the project. PayPal was the first to withdraw followed by Visa, MasterCard, Stripe and eBay.
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