G7 Nations Are Concerned About Stablecoins, They Support Regulation

The G7 nations are concerned about stablecoins as they think that they could undermine the sovereignty of central banks so let’s read what they want in today’s crypto news.

The G7 nations are concerned about stablecoins so they want stronger regulation as they are mostly concerns about private stabelcoins. The developed nations expressed “strong support” for the need to regulate digital assets according to a spokesperson for the US Treasury Secretary Steven Mnuchin.
Finance ministers from the G7 nations like France, Germany, Canada, Japan, Italy, and the UK as well as the US, along with the International Monetary Fund and the World Bank discussed the pandemic, finance, and cryptocurrencies. Mnuchin’s secretary said that the ministers and the governors “reiterated support for the G7 joint statement on digital payments issued in October.”

The statement published a month ago, said that the digital payment services will have to be adequately supervised and regulated in order to address challenges and risks related to financial stability. The G7 said that digital payments defined as an alternative to payments systems that handle fiat currencies have the potential to make payments easier to access, cheaper and faster and they could also be quite dangerous if risks are not addressed.

What’s even more important is that the public sector is accustomed to control the monetary supply and to ensure “the safety and the efficiency of the payment systems, financial stability and the achievement of macroeconomic objectives.” Cryptocurrencies threaten the control of the G7 as the nations think that the privately-run stablecoins like Tether or Diem should start operating once they have addressed regulators’ concerns. It made this claim last year when it rebuked the Facebook Libra project.

The systemic risks that the stablecoins pose for traditional financial systems was brought to the fore in the US with the introduction of the STABLE act that was initiated by Congresswoman Rashida Talib. The bill seeks to force stablecoin issuers to seek federal approval like the blessing of the Federal Reserve and a banking license registration before starting to launch coins. While the G7 is concerned with stablecoins, it is interested in state-run initiatives like a central bank digital currency which could help boost the central bankers. All of the G7 Nations said that they are considering state-backed digital currencies.