G7 finance ministers back need to regulate cryptocurrencies

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The G7 Finance Ministers renewed their calls to create a comprehensive framework for cryptocurrencies regulation. They confirmed that all nations support the need to regulate digital assets on a global scale, according to the statement following the officials’ virtual meeting.
The G7 regulators think that digital payments in cryptocurrencies are able to improve the financial inclusiveness and reduce costs and inefficiencies of the existing payment systems. However, the process need to be totally regulated and controlled by the relevant authorities.
The strong position belonged to German Finance Minister Olaf Scholz, who emphasized concerns about authorizing Facebook’s cryptocurrency in Europe. He said:
“A wolf in sheep’s clothing is still a wolf. It is clear to me that Germany and Europe cannot and will not accept its entry into the market while the regulatory risks are not adequately addressed. We must do everything possible to make sure the currency monopoly remains in the hands of states.”
As it was previously reported, Facebook’s coin may be launched as early as January 2021. The project completely changed the initial concept of the stablecoin. It renamed it from Libra to Diem in order to escape regulatory criticism and distance itself from the social media giant.
However, the G7 officials look to be unimpressed by the efforts in this sector of cryptocurrencies. It seems like they still have many questions about the project, including data security issues and potential threats to sovereignty.

CBDC is above suspicions

The G7 financial authorities do not have similar negative feelings about cryptocurrency projects developed by central banks or CBDCs. In other words, the largest global economies are prepared to develop these cryptocurrencies, provided that it is backstopped by a central bank.
A similar strategy was recently supported by the Russian central banker, Elvira Nabiullina. The Russian financial authorities admit the benefits of the central bank-issued digital currencies (CBDC) but oppose Bitcoin and other digital assets out of the regulatory reach. Additionally, Russian legislators proposed a bill with a blanket ban on using cryptocurrencies as a means of payment.
The People’s Bank of China (PBOC) is moving fast towards the launch of digital yuan. The regulator announced the second live testing of it in the city of Suzhou. At the same time, the authorities continue their crackdown on the private cryptocurrency sector. Several China-based cryptocurrency exchanges had their top executives detained by the police/ Some of them, like OKEx, had to to freeze crypto assets withdrawal.

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