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International Business France creates G7 cryptocurrency task force as Facebook’s Libra unsettles governments

Facebook Inc. will introduce a new global cryptocurrency called Libra, part of an effort to expand into digital payments.

DADO RUVIC/Reuters

France is creating a Group of Seven committee to study how central banks ensure cryptocurrencies like Facebook Inc.'s Libra are governed by regulations ranging from money-laundering laws to consumer-protection rules, France’s central bank governor said on Friday.

Governor Francois Villeroy de Galhau said the committee would be led by Benoit Coeure, a European Central Bank board member.

Facebook announced plans this week to introduce a new global cryptocurrency called Libra, part of an effort to expand into digital payments.

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It has joined with 28 partners, including Mastercard Inc., PayPal Holdings Inc. and Uber Technologies Inc. to form Libra Association, a Geneva-based entity that will govern the new digital coin, according to marketing materials and interviews with executives. No banks are yet part of the group.

Facebook’s announcement drew a fast, worried reaction. The U.S. Senate Banking Committee said it would hold a hearing on the plans next month. David Marcus, who oversees Facebook’s blockchain efforts, is expected to testify, according to a source in Washington familiar with the matter.

Bank of England Governor Mark Carney said Libra had to be safe or it would not happen, and that the world’s major central banks would need to have oversight.

France, which holds the rotating presidency of the G7 nations, has said it does not oppose Facebook’s creating an instrument for financial transactions, but it adamantly opposes that instrument becoming a sovereign currency. “We want to combine being open to innovation with firmness on regulation, this is in everyone’s interest,” Mr. Villeroy told finance industry officials.

The concept of a “stable” cryptocurrency still needs to be defined, Mr. Villeroy said. In particular, what such instruments are stable against and how fixed their exchange rates are need to be determined.

Mr. Villeroy also called for a network of national anti-money-laundering authorities, coordinated by the European Banking Authority, to carry out emergency measures and even substitute for national authorities, rather than creating a specialized European agency.

Several ECB officials, including Mr. Coeure, have argued in favour of creating such an agency over the past months.

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