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Facebook’s ambitious plans to launch a global digital currency is about to hit another setback this week as financial leaders from the G7 move to publicly oppose the project.
According to Reuters, finance minsters and central bankers from the G7—a club of seven of the world’s biggest economies including the U.S., Japan Germany and the U.K.—will publish a document on Tuesday that says Facebook’s currency, known as Libra, should not launch in its present form.
The document refers to a “global stablecoin project,” which describes Libra. Stablecoins are a form of cryptocurrency, akin to Bitcoin, that are pegged on a one-to-one basis with a traditional currency or basket of such currencies.
“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,” a draft of the document reportedly states.
The draft also reportedly warns that, without proper regulation, a project like Libra could undermine financial stability, consumer protection, privacy, taxation or cybersecurity.
The Libra team did not immediately offer a comment about the impending report.
Facebook first announced the Libra project, which is being guided in part by former PayPal president David Marcus, in June of 2019. The project seeks to launch a new form of digital money managed by a consortium of tech and financial companies. It would allow users on Facebook and other online platforms to use the Libra currency to pay each other or a merchant by means of various digital wallets.
The project quickly ran into headwinds, however, amid concerns from politicians and regulators that it would give Facebook—already the subject of antitrust investigations—too much power. Meanwhile, academics have questioned whether a new global currency could disrupt the world’s financial system by leading consumers to use Libra instead of local currencies.
It’s not immediately clear what effect the G7 declaration will have on Facebook’s plans to launch Libra, or what sanctions the various countries would impose if the company moves forward. The controversy comes at a time when many central banks, notably China’s, are planning to launch digital versions of their national currencies.
An earlier version of this story incorrectly stated David Marcus is leading the Libra project. Marcus is directing Facebook’s digital wallet, Novi. The overall Libra Association project is being led by Stuart Levey.
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