Leaders of major democratic countries will meet this weekend in Biarritz, France, for the G-7 summit to discuss Facebook’s cryptocurrency, controversial digital services’ taxation and Brexit, among other issues.
Continue Reading Below
Experts expect the principal global economic concern at meeting to be looming uncertainty of Facebook's proposed cryptocurrency Libra.
François Villeroy de Galhau, France’s chief of the Banque de France and chairman of the French Prudential Supervisory and Resolution Authority (ACPR), addressed growing concerns with Libra while speaking in June on the heightened risks of money laundering and the perceived threat of terrorism financing. He said vulnerabilities in the market “undermine our democracies, and more directly undermine confidence in the financial system and its stability."
ACPR monitors cryptocurrency and is investigating concerns about the currency’s stability and has created a task force to assess the matter.
“ln the coming months [we will] examine the requirements of anti-money laundering, but also those of consumer protection, of operational resilience, as well as any questions of transmission of monetary policy,” Villeroy de Galhau said.
“We want to combine openness with innovation and firmness on regulation: This is in the interest of all. And we must at the same time improve the efficiency of the existing cross-border payment systems. The Banque de France is actively promoting a European strategy in this area.”
While France’s President Emmanuel Macron has been supportive of new technology, both he and French Foreign Minister Bruno Le Maire have said regulation will need to greatly improve in this area. Many other nations have joined their skeptical sentiments of the currency.
German Finance Minister Olaf Scholz said economic disruption was imminent and touted the importance of sovereign national currencies.
“The issuance of a currency does not belong in the hands of a private company because this is a core element of state sovereignty,” said Scholz. “The euro is and remains the only legal means of payment in the euro area.”
Perhaps the most outspoken critic of the tender is Facebook is President Trump, who tweeted apprehension about its dependability.
Among other conversations at the G-7 summit will be Kristalina Georgieva, whom the European Union recently nominated to head the International Monetary Fund and replace outgoing IMF leader Christine Lagarde.
Leaders are also expected to cover the controversial digital services taxation, which companies like Google and Amazon blasted in a U.S. hearing this week. Big Tech argues the rollout of taxation, like France’s 3 percent tax, by companies with more than 25 million euros in French revenue and 750 million euros ($838 million) in global revenue, unduly pressures the platforms and will ultimately be a detriment to small businesses and consumers. Trump has threatened retaliatory tariffs on French wine if the levies are executed.
Biarritz will also be the first time Trump and newly installed British Prime Minister Boris Johnson are meeting since Johnson took the post. The group is expected to discuss the fate of Britain and its highly contested exit from the European Union.