Facebook’s Tuesday (June 18) news of the launch of its Libra cryptocurrency was heard around the world, and the Group of Seven (G7) nations definitely noticed, with the coalition calling for an investigation into the supposed risks of cryptocurrencies and how they would affect the current financial system, according to a report by The Financial Times.
The G7 wants to create a working group that will investigate how to make sure that there are proper controls against the threat of money laundering with cryptocurrencies as well. Also participating in the working group will be the International Monetary Fund.
This information came to light through a letter from the French finance minister Bruno Le Maire and the governor of the Banque de France, François Villeroy de Galhau.
The presidency of the G7 rotates, and France is currently in the presidential seat.
Facebook’s Libra is supported by upwards of two dozen companies and groups, including Uber and Mastercard, but Facebook acknowledges that it needs the regulatory approval of governments and existing systems in order to move forward.
“The success of this venture depends on its trusted and safe integration with the existing financial system,” Facebook said on Tuesday. “The world’s governments, specifically regulatory and law-enforcement authorities, are essential partners in this endeavor.”
The currency, Facebook said, would be backed by existing currencies and hard assets. Also, users would be able to perform instant and almost completely cross-border free money transfers from their phones.
Libra also caught the attention of The BoE, the U.K. Treasury and the Financial Conduct Authority, who have all had meetings about the implications of Libra and its potential consequences on the U.K.
Mark Carney, the governor of the Bank of England, said he had an “open mind” when it came to Libra, but that the launch would not be an “open door,” and that it would have to live up to the “highest standards.”
Carney explained that if Libra was immediately popular with users “it would instantly become systemic and will have to be subject to the highest standards of regulation.”
Carney also shared similar fears of money laundering and said rules needed to be put into place to make sure Libra had “operational resilience,” which meant safeguards against things like cyber attacks and lack of privacy control.
It would also need to be open, he said, so other companies could join and collaborate with it.