The upheaval caused by the release of Facebook’s cryptocurrency Whitepaper has inadvertently confirmed the onset of cryptocurrencies. This is cause major Governments to review not only Facebook’s plans but also their regulations around it.
Currently, not many laws are established around these new asset types; there is a lot of ambiguity around its characteristic as security, short or long term asset or something entirely new.
Reportedly, Finance has initiated a G7 task force to analyze the impact of cryptocurrencies on Central Banks. Benoit Coeure, a European Central Bank board member, will lead the task force.
Villeroy de Galhau, the Governor of Bank of France, said,
“We want to combine being open to innovation with firmness on regulation. This is in everyone’s interest.”
The G7 comprises leading world economies France, Germany, Italy, Japan, the United Kingdom, the United States, and Canada. Currently, France is the President of the association. Facebook has received considerable criticism from England as well. The Governor of Bank of England, Mark Carney expressed his concerns around Libra. He said that the release was tentative to regulatory approval.
While Facebook intents to provide a stablecoin on a global scale, the volatility in price does not seem to be an issue here. However, KYC compliance and anti-terrorist financing are the two most important issues that must be adhered to while ensuring the privacy of individuals. The concerns around Facebook misusing their database of users as apparent in the US Presidential Election of 2016 are still at large.
While the French Government is not against innovation or cryptocurrency per se, they “do oppose the idea of it becoming a sovereign currency.”
The G20 Summit will be held in Japan towards the end of this month. A Virtual Asset Provider Summit, V20 has been scheduled along the sideline of the world conference. It will be attended by executives from leading Cryptocurrency Exchange all over the world.
The G7 countries do not include Russia, China, or India. Moreover, there is significant apprehension around the eastern lands of China and India of accepting the cryptocurrency. While Facebook is banned in China, India forms one of the largest markets for the Social Media Giant because of its massive population.
Hence, the regulatory announcements in the coming weeks are expected to clear the ambiguity around cryptocurrency regulations all around the world.
Do you think that Governments would agree to allow cryptocurrencies unanimously or there will be exceptions? What will be the impact of such regulations? Please share your views with us.