The G7 countries are still blocking the way to a global stable corner such as the Libra. Such a project is not allowed to go commercially until clear rules are enacted.
Although the Libra stablecoin project is no longer in the headlines, it continues to prepare for its launch. Last month, the Libra umbrella organization announced the appointment of James Emmett as head of Libra Networks.
However, Facebook and its partners will have to continue to be patient. Regulators are not letting their guard down. Central bankers and finance ministers in the G7 countries are still obstructing the launch of operations.
No global stablecoin without strict compliance
Representatives from the United States, Canada, Japan, Germany, France, Italy and the United Kingdom are imposing expectations on global stablecoin projects. G7 leaders oppose the launch of the Libra according to a draft statement consulted by Reuters.
“The G7 continues to maintain that no global stablecoin project should begin operation until it adequately addresses relevant legal, regulatory, and oversight requirements through appropriate design and by adhering to applicable standards,” the Finance Ministers agreed.
For the past year, the same has been true for Facebook, which was initially attempted by a power grab. However, the common front against Libra is not cracking, preventing the US firm from being forced into action.
“Stricter requirements” for Libra in Europe
And the G7 states do not seem to want to hurry. In July 2019, they already considered that Facebook’s cryptocurrency could not see the light of day until a dedicated regulatory framework had been defined.
One year later, this framework still does not exist, even if in Europe a project in this direction is progressing. In September, the Commission adopted its digital finance package. It includes specific measures for cryptoactives, including stable corners.
The Commission proposes a “tailor-made regime” with “strict requirements” for issuers. Similarly, providers of cryptoactives services will have to comply with conditions to obtain authorization for the single market.
But for issuers of major stablecoins, regulation will be even more demanding. They will have to comply with “stricter capital requirements, liquidity management and interoperability requirements” says the Commission.