The Group of 7 (G7) reiterated its stance that no global stablecoin project should begin operation until it adequately addresses “relevant legal, regulatory, and oversight requirements.” The G7 is an informal club of 7 wealthy democracies – Canada, France, Germany, Italy, Japan, the United Kingdom, and the United States.
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The Finance Ministers and Central Bank Governors of the G7 met virtually on 28 May 2021, and Finance Ministers met in London on 4-5 June 2021, joined by the Heads of the International Monetary Fund, World Bank Group, Organisation for Economic Cooperation and Development, Eurogroup, and (on 28 May) Financial Stability Board (FSB). The comments were included in a June 5 policy paper published after the meeting. This is not the first time the G7 had discussed stablecoins. The October 2020 statement from G7 contained a similar language.
“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,” the October 2020 statement read.
Currently, FSB is working on reviewing regulatory, supervisory, and oversight challenges to the implementation of its High-Level Recommendations for global stablecoin arrangements. The G7 announced its support for the efforts of FSB.
On the Central Bank Digital Currencies, the Jun 5 Policy Paper said, “………….G7 Central Banks have been exploring the opportunities, challenges as well as the monetary and financial stability implications of Central Bank Digital Currencies (CBDCs) and we commit to work together, ……………………….. Our objective is to ensure that CBDCs are grounded in long-standing public sector commitments to transparency, the rule of law and sound economic governance. CBDCs should be resilient and energy-efficient; support innovation, competition, inclusion, and could enhance cross-border payments; they should operate within appropriate privacy frameworks and minimise spillovers. We will work towards common principles and publish conclusions later in the year.”
This meeting also committed to reaching an equitable solution on the allocation of taxing rights, with market countries awarded taxing rights on at least 20% of profit exceeding a 10% margin for the largest and most profitable multinational enterprises. The G7 is currently headed by the UK and the annual summit scheduled on 11-13 June 2021. The UK has invited Australia, India, South Korea, and South Africa as guest countries to this year’s G7.