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G7 Taskforce Warns Global Crytocurrencies Like Libra Pose Risks, May Not Be Approved (bbc.com) 92

Posted by EditorDavid from the new-money dept.
"Stablecoin" cryptocurrencies like Libra pose a risk to the global financial system, warns a new report by the G7 group of nations.

An anonymous reader quotes the BBC: The G7 taskforce that produced the report includes senior officials from central banks, the International Monetary Fund and the Financial Stability Board, which coordinates rules for the G20 economies. It says backers of digital currencies like Libra must be legally sound, protect consumers and ensure coins are not used to launder money or fund terrorism.... The draft report says: "The G7 believe that no stablecoin project should begin operation until the legal, regulatory and oversight challenges and risks are adequately addressed...."

The draft report outlines nine major risks posed by such digital currencies. It warns that even if Libra's backers address concerns, the project may not get approval from regulators... "Addressing such risks is not necessarily a guarantee of regulatory approval for a stablecoin arrangement," the report says.
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G7 Taskforce Warns Global Crytocurrencies Like Libra Pose Risks, May Not Be Approved More

G7 Taskforce Warns Global Crytocurrencies Like Libra Pose Risks, May Not Be Approved

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  • Libra should indeed get lots of regulatory oversight, but not because it's a crypto currency - Facebook is a de-facto monopoly in it's area of social media and messaging, and so it should be regulated in that sense. Further, FB becoming a financial services company means it should be regulated as one - just like every other such company in the US/world. No need for anything "crypto" to be applied to it.

    • Re:Regulations (Score:4, Insightful)

      by ArchieBunker ( 132337 ) on Monday October 14, 2019 @08:04AM (#59305146)

      Paypal operates exactly like a bank and follows no bank regulations. Your account and funds can be frozen for any reason at their whim. Governments are scared of crypto because it undermines their control. Governments really hate competition.

      • Governments also don't like it when their citizens get scammed out of their life savings. It tends to push up pension/welfare costs (YMMV depending on country).

        • Governments are fine with people throwing their money away as long as they get a cut. The lottery, casinos, sports betting. When a lot of money starts to move around they need to get involved. Now that everyone is vaping, states have enacted heavy vape taxes. Because why the hell not. Sales tax isn't enough to feed the money addiction that government suffers from.

          • "Governments are fine with people throwing their money away as long as they get a cut. "
            Spot on.

          • (YMMV depending on country).
            Maybe you just need a better government...

          • Being a bit of a contrarian (I agree with you in principle) But why did states wait so long to start decriminalizing and taxing marijuana?

            • Re:Regulations (Score:5, Insightful)

              by alvinrod ( 889928 ) on Monday October 14, 2019 @12:45PM (#59305948)
              There's no simple, single answer to this, but there are a lot of contributing factors.

              One is that many religious groups view drug use as immoral and didn't really have a problem with legislating their own moral code for marijuana any more than they did with unions between homosexual couples. Notice that both of these are becoming legal around the same time as the older members of those groups die off and the younger generations don't care as much about enforcing their morality on others.

              Another is that while taxing marijuana might be a good overall source of income for the state, it wasn't for everyone. In California, for example, one of (if not) the largest contributor to campaigns against legalization was the California prison guard union. They knew how many people were getting locked up for drug possession charges and it was in their collective interest for marijuana to remain illegal. Alcohol companies have also worried that legal marijuana would cut into their business as well.

              I also suspect that social inertia plays a role in this as well. We didn't have any new information we didn't already have to suggest that it wasn't right to change our minds ten or even twenty years prior. But we had made it illegal previously and we surely must have done that for good reasons, so it makes sense for use to continue to keep the existing laws in place. It takes a considerable amount of time for people to shake off old ideas that they've held, and the average person isn't going to put a lot of thought into whether marijuana should be legalized when it's much easier to just fall back to their previous answer, even if they don't have any good reason for why they were against legalization beyond "because I've previously been against legalization!"

              Finally, there's always a bit of uncertainty around any big shift in policy like this. There are the true believers on either side that either think everything will go according to their plan or that this change will usher in the downfall of civilization. Reality tends to be somewhere more towards the middle in most cases, but unless you fall into either of those two groups that are utterly convinced of a thing, the natural reaction tends to be caution towards change. It's much easier to pass laws when you can point to some other example of how it worked out (and even then it's still hard depending on what you're doing) as opposed to possibilities that may not be any more valid in the mind of the average person than the possibilities that the opposition wants to put forward.

              There are probably several other reasons that I've missed or haven't even considered. A single human is a remarkably complex system. Putting millions of them together isn't going to simplify matters any.
            • Good article discussing the reasons here: https://www.businessinsider.co... [businessinsider.com] Sometimes governments like oppressing people even more than they like money.

      • Governments are scared of crypto because it undermines their control. Governments really hate competition.

        It is less "scared" of anything and more along the lines of people being able to be scammed out of lots of money. Crypto in of itself isn't that big a deal. However, there are people who will take advantage of other people using "crypto". Because this deals with the financial sector, it puts it in a unique position for massive amounts of financial and social harm, hence why banks face a lot of regulation. Remember, we once upon a time did the light regulation in the financial sector and I'm sure you rem

        • I get that no one on Slashdot would ever fall for such parlor tricks, but the vast majority of society will and like it or not, that'll eventually affect you.

          I agree. For those who don't: /. members don't click on phishing links, but the Gentle User does.

        • Re: (Score:2)

          by DarkOx ( 621550 )

          I doubt that very much. I don't think they are worried all that much about scams. I mean really we are talking about regulators that only decided a person marketing themselves as a financial advisor has a fiduciary responsibility to his clients a few years ago. Regulators that are totally okay with commission free day trading as if day all those "letters" etc are anything but pump/dump schemes...

          Sorry I don't for a second think the fears are anything other than 1) Not getting their cut, it creates a easy p

      • Governments are scared of crypto because it undermines their control.

        Governments need that control to keep the economy stable, not for some conspiratorial, chemtrail reason.

      • Even the smallest Central Bank from a first world nation could easily take control of Bitcoin. They deal in trillions while Bitcoin barely cracks the billions. What they're concerned about is money laundering.
        • No, you can't. Bitcoin is already banned by China. The requirements for a successful attack, of the network itself, are beyond the reach of countries by now.

        • Re: (Score:2)

          by DarkOx ( 621550 )

          The problem is than people will just switch to something else. They might be able grab handful of popular currencies but they can't keep up with it all. Something like Libra is a threat because unlike the various 'coins' facebook and the potential banks partners absolutely had enough billions behind it that would have shown up at the macro level

    • No (Score:2)

      by DogDude ( 805747 )
      de-facto monopoly in it's area of social media and messaging

      No, it's not at all.
      A. Social media isn't necessary to anybody.
      B. people can and do message each other in all sorts of ways. I've never used Facebook Messenger.

      But it IS a defacto monopoly in it's core business, which is ADVERTISING. I think that it should be regulated from that standpoint, though. It it really the only place that's worth advertising any more (at least in the US). Old fashioned TV, radio, etc. is largely useless.

  • Risk... (Score:3, Insightful)

    by bradley13 ( 1118935 ) on Monday October 14, 2019 @08:04AM (#59305144) Homepage

    "'Stablecoin' cryptocurrencies like Libra pose a risk to the control we exercise on the global financial system, warns a new report by the G7 group of nations."

    FTFY.

    The national banks don't want alternatives out there. Otherwise, how can they print endless money to pay off endless debts, caused by irresponsible financial decisions? Or put more prosaically: Politicians don't like competition at the trough.

    Personally, I think we desperately need a couple of currencies that are managed outside of the existing political structure.

    • Re: (Score:3, Insightful)

      by thegarbz ( 1787294 )

      Otherwise, how can they print endless money to pay off endless debts, caused by irresponsible financial decisions?

      Thanks for the very over simplified anti-government view on the complex topic of exercising control of one of the few handles a government has to keep its local economy in a functioning state.

      The government having ability to print money is a bit like democracy as a form of government, it's horrible, but the best of all alternatives.

      • Re: (Score:3)

        by jythie ( 914043 )
        Yeah, it isn't like humanity has not tried these other systems before and found them to be worse. Central banks are a result of centuries of iterative hotfixes on the economy.

        • Central Banks are a result of corruption. It is not a product of hot-fixes on the economy. It is the product of a simple concept. A central bank to wield non-legislative power over a fractional banking system and a mission statement that creates a pseudo-complex view of economy.

          Economy is stupid simple, supply and demand modified by control. The difficulty is all of the rules, regulations, corruption, and interference the control of humans at multiple levels throughout creates.

          The reason that we would h

          • Re: (Score:1)

            by DogDude ( 805747 )
            Economy is stupid simple, supply and demand modified by control.

            You just outed yourself as an idiot. You might want to consider stopping saying things at this point. A country's economy is NOT "stupid simple".

            • Nope, you just like to call it complex because you need something to blame on your financial shortcomings. Like most others... blame everything else but yourself.

              As long as you know what is going on... you can game the system but you are too stupid to accomplish that, so you will remain poor. That or you are one of the rich folks that need people to think something is complicated when it is not so that you can keep pulling the wool over their eyes. Which only leaves you in 1 of 2 possible positions. The

          • Anyone who thinks an economy is simply doesn't know the first thing about economics, at all.

            • You have it backwards... anyone who thinks its complex is either participating in a lie, or is too ignorant to discuss the subject.

              It only becomes complex when we "force" it to be complex. There is nothing complex about buying a product from someone. But we like to make it complex to hide all of the shady shit going down behind the scenes so morons like you can be stupid with an excuse.

              This is why Hollywood used "creative accounting"... to trick easy to fool people like you into thinking they lose more mo

          • Central Banks are a result of corruption.

            That's an opinion. You want some certainty then you can read this: "The above post by SirAstral is the result of astounding ignorance."

            There you go, facts not fiction.

      • Otherwise, how can they print endless money to pay off endless debts, caused by irresponsible financial decisions?

        Thanks for the very over simplified anti-government view on the complex topic of exercising control of one of the few handles a government has to keep its local economy in a functioning state.

        The government having ability to print money is a bit like democracy as a form of government, it's horrible, but the best of all alternatives.

        Just as democracy can devolve into mob rule, fiscal management by national banks can devolve to irresponsible deficits and money-printing. Sinse most /. readers are in the US, let me remind you of ShadowStats, where you can see a truer picture of current inflation - carefully hidden by changing measurement techniques, and driven by the ever-growing governmental deficits. Add huge amounts of money to a system, and you get inflation.

        I submit that a responsible government should on average run a balanced budge

        • and money-printing

          Hold your horses. Do you even understand the concept of money-printing, why it's done, and the impact on the macro economic structure of society? Here's a bit of a kicker for your own history: Printing money aids inflation. Zero inflation is bad. Negative inflation is worse. How bad? Well have you heard of the great depression? Guess what in part caused this... did you guess 3 years of negative inflation due to supply of money not stimulating the economy? Because if you did you'd be right.
          An economy can't w

    • If you don't like the government, get a new one. You know how to do that, right?

      Now, let's try to see your suggestion on how you plan to do the same with Facebook.

  • States have the exclusive legal authority to print money. Now, the Libra Foundation appears and says "no, we are not printing dollars, we are generating Libras out of thin air, and each Libra is exactly one dollar".

    Hmmm......

    • "States have the exclusive legal authority to print money."

      This is untrue. Anyone is free to print money. What you cannot do is print something that purports to be other than what it is. You cannot print US Bank Notes, for example. However you are entirely permitted to print "Bank of Fucknuts" notes all you like. Whether or not anyone else will believe that your money is worth any more than the paper it is printed on is debatable.

      The Banksters and the Politicians are up in arms because if Libra were su

      • Good luck with the SEC, if your "Bank of Fucknuts" notes have a minimal succeed...

      • I would read up the laws of your country before you start issuing your own currency. It might be illegal.

        For the reason why, you might want to read up what "scrip" is. And why it's mostly illegal except for a very few select applications.

  • By the time bureaucrats and politicians have figured out how they want to hold your hand, the technology will be outdated.

    • Re: (Score:3)

      by jythie ( 914043 )
      If the technology outdates that quickly, it wasn't really a solution in the first place.
      • Do you realize that until the handholding is decided, developers can't really continu their work?
        If they do, much of the work until the decision is made will have to be thrown away.
        Maybe only the biggest provider will have bought the politicians and bureaucrats so their system somewhat fits the regulation.
        Bitcoin is being developed constantly and faces pressure from many competitors who're trying to do a better job.
        Yes, a lot of code is thrown away, but the public decides what code gets used and to what

  • Realm-less coin (Score:4, Insightful)

    by rmdingler ( 1955220 ) on Monday October 14, 2019 @09:01AM (#59305260) Journal

    I'm generally for the privacy a cryptocurrency imparts an individual in the age of our transformation to a cashless economy.

    Unfortunately, once corporations are involved, alternatives to coin of the realm will neither remain small in number nor beholden to altruistic principles. It's not that governmental monetary control is anywhere in the neighborhood of perfect... it's just that it would be an order of magnitude worse in the hands of those beholden to the bottom line.

    Kind of like placing the upkeep of roads and bridges and general infrastructure in the hands of Enron.

    • > it's just that it would be an order of magnitude worse in the hands of those beholden to the bottom line.

      Worse than a million dead Iraqis to protect the petrodollar? Worse than open-air slave markets in Libya as a consequence of stopping the African Dinar?

      Zuck is a grade-A dickhead, but Jesus, this conversation needs some damn perspective. I'll take Zuckerbergs over Rothschilds any day, if that's the only choice. At least people have to be alive and comfortable to see ads.

      • > it's just that it would be an order of magnitude worse in the hands of those beholden to the bottom line.

        Worse than a million dead Iraqis to protect the petrodollar? Worse than open-air slave markets in Libya as a consequence of stopping the African Dinar?

        Zuck is a grade-A dickhead, but Jesus, this conversation needs some damn perspective. I'll take Zuckerbergs over Rothschilds any day, if that's the only choice. At least people have to be alive and comfortable to see ads.

        I'm less than certain than you that you can draw an uninterrupted line from 1st World interference in African currencies to their ultimate international demise, but, middle eastern deathths a couple orders of magnitude above that of an american school shooting have the same resonance in our domestic news cycle as World Series results in Liverpool.

  • Here is the International news [theinfovalley.com] [theinfovalley.com] site you can see world-class news.

  • May Not Be Approved

    Approved for what? If bagel shop sells me a bagel for it, if a landscaper will trim my lawn for it, what do I care for someone else "approving" of it?

    • Re: (Score:2)

      by orlanz ( 882574 )

      Currency is a little more than that.... There is a reason bagel shops, no matter how small, don't sell single bagels for $100 notes. The current regulations would figure out the money launderying scheme pretty quickly.

  • This feels familiar... (Score:3)

    by Syphonius ( 11602 ) on Monday October 14, 2019 @10:57AM (#59305578) Homepage

    Now who's crying about their buggy whip business?

    "ensure coins are not used to launder money or fund terrorism"

    How's that working out for you? Pretty sure money is still being laundered and terrorists are still being funded without cryptocurrencies.

  • Too bad it took something as high-profile as Libra for the authorities to wake up and take notice.

  • As in: Who's evil, scheming, and conspiring to rule the world? ... "Them."

  • That's like the wicked witch warning us to avoid flying houses.

    The general rule is, if the financial industry doesn't like it, that means it's good thing.

    We gotta crack that nut somehow

  • Not until we reach the level of safety that our existing global currency, the U.S. dollar, has which is totally proof against funding terrorism, drug cartels, and illegal arms dealing.

    bwahahahaha

  • Politicians are the ultimate insider traders on crypto currencies. Buy, ride it up, sell, declare it illegal.

    You don't think pols in places like China didn't do this? Why do you think people go into power? Hint: To filfill your pet desire to justify your vote isn't it.

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