France’s central bank governor, Francois Villeroy de Galhau, announced plans for the creation of a task force dedicated to cryptocurrencies. The task force, representing the G7 countries, will be lead by European Central Bank board member Benoit Coeure.
The purpose of the G7 task force is to study how central banks ensure cryptocurrencies like Facebook’s recently launched Libra are governed by regulations. These include money-laundering laws as well as consumer-protection rules, France’s central bank governor said on Friday.
Governor Francois Villeroy de Galhau confirmed the task force would be led by Benoit Coeure, a European Central Bank board member. News of France’s plans follow the recent launch of Facebook’s new global cryptocurrency called Libra, part of an effort to expand into digital payments.
The social giant’s move into the crypto sector made headlines and drew a fast, worried reaction. The U.S. Senate Banking Committee said it would hold a hearing on the plans next month. David Marcus, who oversees Facebook’s blockchain efforts, is expected to testify, according to a source in Washington familiar with the matter.
28 partners, including Mastercard, PayPal and Uber, have so far confirmed participation in the newly formed Libra Association, a Geneva-based entity that will govern the new digital coin, according to marketing materials and interviews with executives. No banks are yet part of the group.
The announcement for the formation of the new G7 task force comes in the wake of France and Germany moving towards further regulation of cryptocurrencies. France holds the rotating presidency of the Group of Seven nations and doe not oppose Facebook’s creating an instrument for financial transactions, but it opposes that instrument becoming a sovereign currency. The French government has called for the regulation of cryptocurrencies, to curb tax evasion and what it considers illegal transactions, making the country the latest to seek to control the use of digital currencies.
“We want to combine being open to innovation with firmness on regulation. This is in everyone’s interest,” Villeroy told finance industry officials.
The French government demands a better definiton of the concept of a “stable” cryptocurrency. To this effect, Facebook will have to propely explain within legal frameworks, what such instruments are stable against and how fixed their exchange rates are need to be determined.
This comes after French Minister of the Economy, Brune Le Maire, voiced concerns about the Libra becoming a safe haven for illegal activities. He has firmly stated that governments cannot allow corporate cryptocurrencies to rival sovereign currencies. Germany and other G7 nations share the sentiment on the hot topic.
Villeroy also called for a network of national anti-money-laundering authorities, coordinated by the European Banking Authority, to carry out emergency measures. These may include even substituting for national authorities, rather than creating a specializd European agency.
Several ECB officials, including Coeure, have argued in favor of creating such an agency over the past months.
There is still no timeline announced for France’s G7 cryptocurrency task force. At present, it is only known that it is coming before Libra’s expected release date in 2020. The social media giant is still in talks with the SEC before it can even begin to properly approach legal pushback in other nations.