G7 urges strict regime, for Libra coin, mulls tax for big tech firms
Digital currencies such as Facebook’s planned Libra raise serious concerns and must be regulated as tightly as possible to ensure they do not upset the world’s financial system, Group of Seven finance ministers and central bankers said Thursday.
Finance Minister Bruno Le Maire of France, which holds the rotating presidency of the G7 top world economies, told a news conference the group opposed the idea that companies could have the same privilege as nations in creating means of payment — but without the control and obligations that go with it. “We cannot accept private companies issuing their own currencies without democratic control,” Le Maire said.
“Everybody is in a place where we recognize that new technologies can provide advantages,” Canadian Finance Minister Bill Morneau told Reuters. “But people want safe and cheap, not just cheap. And so our job is to think about safe too ... We’ve got an emerging sense that we need to work together on this.”
In a summary of the informal G7 talks in Chantilly, north of Paris, the French presidency said the ministers and governors had agreed that “stablecoins and other various new products currently being developed, including projects with global and potentially systemic footprint such as Libra, raise serious regulatory and systemic concerns.”
Facebook’s June 18 announcement of Libra heralded an effort to expand into e-commerce and global payments.
The G7 also agreed that large tech companies can be taxed in the countries in which they make money, even without being physically present there.
They also agreed that there should be a minimum level of tax to discourage countries from competing in a “race to the bottom” to attract business from digital multinationals.