London Daily

Focus on the big picture.
Thursday, Oct 29, 2026

Facebook's digital currency dealt another blow

Facebook's digital currency dealt another blow

Leaders of the G7 group of the world's biggest economies issue warning about digital coins like Libra.

Facebook's Libra cryptocurrency must not go ahead until the company proves it is safe and secure, according to a report by the world biggest economies.

In a blow to the social media giant, the report by the G7 group of nations warns cryptocurrencies like Libra pose a risk to the global financial system.

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.

The warning comes just days after payments giants Mastercard and Visa pulled out of the Libra project, citing regulatory uncertainty.

The G7 taskforce that produced the report includes senior officials from central banks, the International Monetary Fund (IMF) 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.

While the report, which will be presented to finance ministers at the IMF annual meetings this week, does not single out Libra, it says "global stablecoins" with the potential to "scale rapidly" pose a range of potential problems.

Stablecoins like Libra are different to other cryptocurrencies, such as Bitcoin, because they are pegged to established currencies such as the dollar and euro.


Stifle competition

While this is designed to limit big swings in their value, the report says global cryptocurrencies like Libra can pose problems, including for policymakers setting interest rates.

The report also warns that Libra could stifle competition among other providers and even threaten financial stability if users suddenly suffer a "loss of confidence" in the digital currency.

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".

It also cast doubt over the viability of the project even if Libra's backers satisfy concerns raised by governments and central banks.

"Addressing such risks is not necessarily a guarantee of regulatory approval for a stablecoin arrangement," the report says.

Facebook is facing intensifying international scrutiny of its cryptocurrency project.

A separate FSB report, published on Sunday, warned that the introduction of "global stablecoins" poses a host of regulatory challenges.


Launch delay

In a letter to G20 finance ministers, Randal Quarles, FSB chairman, warns that these challenges "should be assessed and addressed as a matter of priority".

The FSB is working with officials around the world to identify potential regulatory gaps, and will publish a report next summer.

Facebook has already warned that regulatory scrutiny may delay or even impede the launch of Libra.

Libra is not the only digital currency that faces scrutiny.

JP Morgan's JPM Coin, which is backed by US dollars, is a stablecoin that is also likely to come under scrutiny.


'Pressure builds'

The Libra Association, including Facebook, will hold its first board meeting in Geneva on Monday.

As well as Mastercard and Visa, Stripe, eBay and Paypal have also withdrawn from the scheme, which is also backed by ride hailing companies Uber and Lyft.

The G7 report acknowledges that cryptocurrencies potentially provide a faster and cheaper way to move money and make payments and says the current system is often "slow, expensive and opaque".

There are currently 1.7 billion unbanked and underserved consumers who could benefit from wider access to financial services, it adds.

A spokesman for the Libra Association declined to comment. A G7 spokesman could not be reached for comment.

However, Facebook's executive in charge of the Libra project said earlier this month that losing the backing of major firms was "liberating". David Marcus added: "You know you're on to something when so much pressure builds up."
Newsletter

Related Articles

0:00
0:00
Close
Met Office Issues Extended Forecast Highlighting Stable High Pressure Weather Patterns Across the United Kingdom
Scottish Finance Secretary Shona Robison Outlines Changes to Tax Thresholds and Residential Property Levies in Edinburgh
Financial Markets and Government Bond Yields Remain Stable Following Muted Reaction to Autumn Budget Measures
Defence Committee Chair Tan Dhesi Criticizes Budget for Delaying Critical Defence Spending Decisions to Next Year
International Monetary Fund Forecasts United Kingdom Economic Growth at One Point Three Percent for Year
Office for Budget Responsibility Assesses Fiscal Headroom Reduced to Fifteen Billion Pounds Following Global Energy Shocks
Chancellor John Healey Delivers First Autumn Budget Introducing Household Energy Support and Bank Tax Hikes
Aberdeen City Council Co-Leader Faces Binding Vote Challenge as Local Councillors Launch High Court Legal Battle
Housebuilding Across Scotland Falls to Eleven-Year Low Despite Government Declarations of a Housing Emergency
Former Prime Minister Gordon Brown Organizes National Innovation Summit in Manchester to Boost Regional Competitiveness
UK Government Faces Mounting Criticism Over Lack of Environmental Consultation During Artificial Intelligence Datacentre Expansion Talks
Greggs Announces Closure of Four Major Manufacturing Facilities Across Britain Resulting in Seven Hundred Forty Job Losses
British Retail Consortium Warns That Cumulative Employment and Regulatory Costs Threaten High Street Price Stability
Lloyds Banking Group Chief Executive Charlie Nunn Warns That Increased Bank Taxes Could Deter Long-Term Economic Investment
Ipsos Polling Reveals Seven in Ten Britons Expect Personal Tax Increases Amid Deep Public Economic Pessimism
Chancellor John Healey Delivers First Autumn Budget in Parliament Amid Tight Fiscal Constraints and Slower Growth Forecasts
United Kingdom Finance Monthly Review Highlights Rising Long-Term Borrowing Costs and Persistent Energy Price Pressures Across British Markets
Royal Marines Pioneer Rapid Autonomous Drone Operations During Major High North Exercise Involving NATO Allies
House of Commons Justice Committee Urges Chancellor to Align Prison and Courts Reform Ambitions With Concrete Budgetary Resources
Government Investigates Rapid Artificial Intelligence Datacentre Expansion Strategy Following Scrutiny Over Power Grid Demands and Planning Backlogs
His Majesty's Inspectorate of Constabulary Warns Third-Party Supplier Breaches Threaten United Kingdom Police and Fire Service Data
Number of British Businesses in Financial Distress Reaches Highest Level in Two Decades Ahead of Fiscal Announcement
Chancellor John Healey Prepares Autumn Budget Amid Intense Market Scrutiny Over Fiscal Headroom and Spending Pressures
Education or Indoctrination? The Growing Debate Over Religious Participation in British Schools
Germany's Vanishing Shopfronts: The Silent Collapse of the Businesses That Built Its Cities
Northern Ireland Executive Reaches Agreement on Public Transport Modernization and Cross-Border Rail Infrastructure Funding
Department for Energy Security and Net Zero Approves New North Sea Carbon Capture and Storage Industrial Clusters
Office for National Statistics Reports Stabilization in Private Rental Growth Across Major English and Welsh Regional Cities
United Kingdom Automotive Manufacturing Output Rises Moderately as Electric Vehicle Assembly Lines Expand in the Midlands
Competition and Markets Authority Launches Formal Inquiry Into Cloud Computing Infrastructure and Artificial Intelligence Partnerships
Scottish Government Finalizes Emergency Budget Adjustments Following Multi-Year Public Sector Funding Shortfalls
National Health Service England Announces Major Emergency Care Overhaul to Alleviate Severe Winter Capacity Pressures
Chancellor Rachel Reeves Prepares Autumn Budget Amid Intensifying Scrutiny Over Public Spending and Fiscal Rules
Bank of England Signals Cautious Approach to Further Interest Rate Cuts as Persistent Wage Growth and Inflation Pressures Remain
Transport for London Unveils Expanded Zero-Emission Bus Fleet to Meet Capital Air Quality Targets
Higher Education Institutions Face Deepening Financial Strain Amid Declining International Student Enrolment
Automotive Industry Leaders Criticize Government Tax Policies and Urge Action on Retail Consumer Confidence
Environment Agency Issues Flood Alerts Across Scottish and English Waterways Following Heavy Rainfall
Independent Audit Highlights Persistent Security Vulnerabilities Across Legacy Government Digital Portals
Northern Ireland Political Leaders Clash Over Westminster Funding Allocations Ahead of Autumn Budget
Ethnic Minorities in England Face Significant Disparities in Routine Breast Cancer Diagnosis Rates
National Police Chiefs Report Alarming Surge in Domestic Abuse Cases Fuelled by Expanding Illegal Cocaine Market
Government Announces Two Hundred and Twenty Million Pound Pothole Funding Boost for Local Highway Authorities
China Issues Formal Warning Over Potential United Kingdom Restrictions on Chinese Electric Vehicles
British Defence Ministers Sign E5 Pact to Enhance European Military Capabilities and Industrial Cooperation Within NATO
United Kingdom Business Activity Expands at Fastest Pace in Eight Months According to S&P Global Flash Survey
Chancellor John Healey Prepares Major Devolution Package and Bank Profit Surcharge Ahead of Upcoming Autumn Budget
National Health Service Consultants in England Announce Two-Day Strike Action Scheduled for November
Major Clean-Up Under Way Across Britain Following Destruction Caused by Consecutive Storms Austen and Boelo
KEY TRENDS TO WATCH
×