A point of view by Norbert Häring.
Anyone who believes that Facebook’s planned global digital currency, the Libra, is dead because of the resistance of the regulators, could be facing a deceptive manoeuvre. Because in international announcements, words often mean the opposite of what they seem to mean.
Because Mastercard, Visa and Paypal, three particularly important partners, did not participate in the Libra Association after all, and because some regulators and ministers, as well as international groups, criticized the project, it could look as if the global, private currency would go nowhere. But if one reads exactly what the US led G7 group of the seven most important industrial nations recently announced (1), and translates the diplomat’s speech into normal language, one may have some reasonable doubts. It sounds very austere. However, when seen in the light of day, the G7 statement says:
That Libra should be given the green light if operators can ensure that rules on identifying senders and recipients of financial transactions are complied with. This is a requirement that fits well with Facebook’s plans.
That the G7 has disempowered the larger G20 group, which is supposed to be responsible for financial regulation, in regarding the use of Libra.
That US-dominated international regulatory bodies such as the Financial Stability Board (FSB) should make the preliminary decision as to what conditions the Libra Association must meet in order to get started.
Members of the G7 are the USA, Canada, Japan, Germany, France, Great Britain and Italy. Since the great financial crisis, the G7 has taken a back seat. To this end, the G20 was set up on the initiative of the USA to provide direction for international financial regulation. It was regularly the G20 that gave the (informal) work orders to the international standard-setting groups.
In addition to the G7, the G20 includes the most important emerging countries, including China, India and Russia. Obviously, the US has not been able to bring about a decision within this framework that gives the standard setters the task of creating a suitable regulatory environment for Libra. That is why the G7 has taken this on with a working group on „stablecoins“.