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Cryptocurrency

Doubts over Facebook's Libra swirl at G-7 and US Congress

Cryptocurrencies must not challenge national sovereignty, France's Le Maire says

G-7 finance ministers and central bankers convene Wednesday in Chantilly, north of Paris.   © AP

CHANTILLY, France/NEW YORK -- Finance and central bank chiefs from the Group of Seven major economies agreed Wednesday to "act quickly" in response to Facebook's plans to introduce a digital currency.

French Economy and Finance Minister Bruno Le Maire revealed the G-7 consensus on the social media company's Libra coin at a news conference after the first day of meetings.

Le Maire added that nations' sovereign right to issue currencies should not be infringed.

A working group established by the G-7 to study digital coins like Libra presented a report at the meetings. Major areas of interest include protecting users' privacy and preventing the misuse of the digital currency in money laundering.

Also on Wednesday, Libra chief David Marcus was grilled in four hours of testimony at a U.S. House hearing on questions on financial system risks and money laundering loopholes that the cryptocurrency could enable.

Marcus was repeatedly asked to commit not to launch the virtual currency before appropriate regulatory measures are put into place.

House representatives also voiced criticisms and mistrust over Facebook's record on privacy and in allowing Russia's alleged election meddling, after U.S. senators struck a similar tone in a hearing a day prior.

When asked if Facebook intends to compete with Alibaba Group Holding's Alipay and Tencent Holdings' WeChat Pay -- which dominate China's online payment market -- Marcus said "yes."

Brad Sherman, a Democratic representative for Facebook's home state of California, also pointed out that while the tech giant claims to want to serve the world's unbanked, it would not be able to launch Libra in India, a country with one of the largest unbanked populations in the world, where cryptocurrency is illegal.

Libra has been met with suspicion from lawmakers and monetary authorities in multiple countries. 

In Japan, where Facebook recently joined top business lobby, Keidanren, the central bank has said it is keeping a close watch on cryptocurrencies and their impact on the financial system.

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