G7 working group report alarmed a serious concern over the world’s largest cryptocurrency, Bitcoin. As per the report, Bitcoin has failed as a means of payment and store of value”.
The group of seven countries, namely US, Japan, Canada, Italy, Germany, and the U.K have collectively shared a detail report on stablecoins, entitling “Investigating the impact of global stablecoins”. In a report, the Group urged that cryptocurrencies such as stablecoin have failed as “reliable and attractive” means of payment. Although citizens in a few countries such as Venezuela and Argentina are viewing Bitcoin as a store of value, especially when the country’s economy has slowed down, G7’s report refutes this claim. The report, in contrast, mentioned that Bitcoin and other early cryptocurrencies are “highly volatile”, henceforth it added as;
To date, they (Cryptocurrency) have suffered from a number of limitations, not least severe price volatility. Thus, cryptoassets have served as a highly speculative asset class for certain investors and those engaged in illicit activities, rather than as a means to make payments
Since the G7 group considered vitality is the key issue in cryptocurrency, it also talked about other currencies that tend to be stable. In a report, the group wrote about stablecoins and stated, it “might be more readily usable”. The report also added that stablecoins can be considered as a store of value as well as means of payment. While this sounds interesting, G7 also marked that these currencies need a legal basis. In particular, G7 talked about Libra, the controversial cryptocurrency proposed by Facebook. The Group elaborated it as;
The G7 believes that no global stablecoin project should begin operation until the legal, regulatory and oversight challenges and risks outlined above are adequately addressed, through appropriate designs and by adhering to regulation that is clear and proportionate to the risks.
It further report, G7 expressed the need for the central bank digital currencies (CBDCs) that might work to solve the issue which stablecoins like Libra are striving to win over. The group in its report mentioned that the policymakers of the respective countries around the world should dig deeper to tackle the high cost of payment transfer issues, meantime, improving the efficiency of the financial services. It continued;
“central banks, individually and collectively, will assess the relevance of issuing central bank digital currencies (CBDCs) given the costs and benefits in their respective jurisdictions,”
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