96°F
weather icon Clear

G-7 finance chiefs issue stark warning about Facebook’s Libra

CHANTILLY, France — Finance chiefs from the Group of Seven rich democracies issued a stark warning on Thursday that cryptocurrencies like Facebook’s Libra should not be allowed before “serious regulatory and systemic concerns” are put in check.

France, which this year chairs the G-7 gatherings on topics ranging from the economy to security, said it is worried that what some call the “future of money” — encrypted digital currency — could spiral out of control.

France’s concluding summary from this week’s meeting said that the finance officials agreed that while cryptocurrencies could help make payments cheaper and more efficient around the world, they could also be used for money laundering and terrorism financing and could even endanger the stability of global currencies.

Host French Finance Minister Bruno Le Maire likened the creation of Libra to the development of a whole new state.

“We won’t allow private states to emerge that would have the same privileges of a state but without the controls that go with it,” Le Maire told reporters after the meeting in Chantilly, near Paris.

Facebook has proposed pegging Libra to existing currencies to make it more stable than the likes of Bitcoin and useable as a way to pay for things. Governments around the world are rushing to assess how that would affect or destabilize the economy — if, for instance, the cryptocurrency decides to weigh in favor of the dollar or the euro.

The officials agreed that cryptocurrencies like Libra will have to meet “the highest standards” of financial regulation before they can be implemented.

Need for faster money transfers

The statement conceded that there is a need for faster and cheaper international money transfers, and that governments could accelerate “ongoing public and private efforts to upgrade existing payment systems.”

Some, including Germany’s Central Bank President Jens Weidmann, even expressed cautious optimism about digital currencies.

“(It) could be quite attractive for consumers if they keep to what they have promised,” Weidmann told news agency DPA.

Libra has come in for a lot of criticism this week, with U.S. lawmakers this week saying they cannot trust Facebook with a big project like Libra after recent data privacy scandals.

While the officials appeared to be largely on the same page on Libra, they diverged on other topics, such as how to tax companies that do digital business in a country but have no physical presence there.

The U.S. and France in particular are at odds on the issue after Paris said it would put a pioneering 3% tax on tech giants like Facebook and Google.

France’s tech tax, which will soon be signed into law, has provoked a strong rebuke from the White House, which said it could lead to U.S. tariffs on French imports. The French said it will be withdrawn only if a global deal is forged, a diplomatic gamble that aims to obtain leverage with the U.S.

Mnuchin onjects to tech tax

On the orders of U.S. President Donald Trump, Treasury Secretary Steven Mnuchin objected robustly to the plan when he met with Le Maire in Chantilly.

The talks in Chantilly, however, yielded only vague promises.

The G-7 summary said that the countries aim to sketch out the outlines of a global agreement on taxing digital business by next January, and to create an arbitration forum.

Le Maire said the French tech tax will not be withdrawn in the immediate future, and Mnuchin said Trump will continue the investigation into the French.

“The president has instructed us to start a 301 investigation,” Mnuchin said after the meeting, referring to the section of the U.S. Trade Act that allows the U.S. president to retaliate in some cases against a foreign country over trade. It’s the same provision the Trump administration used last year to probe China’s technology policies, leading to tariffs on $250 billion worth of Chinese imports.

Le Maire said the current agreement needed to result in a final decision before France could withdraw its tax.

Yet he remained upbeat, maintaining that the process was moving “in the right direction,” and that the main goal of the G-7’s European members of France, Britain, Germany and Italy had been achieved: For the U.S. to accept language that new tax rules need developing for “highly digitalized business models.”

The G-7 finance meeting, which also includes Canada and Japan, will set the stage for a summit of the countries’ heads of state and government in August.

———

David McHugh in Frankfurt, Germany, contributed to this report.

Don't miss the big stories. Like us on Facebook.
Business Videos
MAGIC Convention Day 3
The fashion trade show MAGIC, held Monday through Wednesday at the Las Vegas Convention Center. (Elizabeth Brumley/Las Vegas Review-Journal)
MAGIC Las Vegas - Day One
The biannual MAGIC convention show opened Monday at the Las Vegas Convention Center. (Elizabeth Brumley/Las Vegas Review-Journal)
Allegiant celebrates naming deal with tailgate party
Allegiant Air employees celebrate with a tailgate party after the company’s naming deal with the Raiders for the new Las Vegas stadium.
Nevada's sportsbook operators welcome competition
Sportsbook operators from near and far are looking to get into in the established Nevada market, experts say. (Las Vegas Review-Journal)
Get a first look of MSG Sphere construction in Las Vegas
Representatives of The Madison Square Garden Company give the first glimpse of progress Tuesday of the under-construction MSG Sphere — a first-of-its-kind performance venue with high-tech audio and visual capabilities.
There's a new place to play board games in Las Vegas
Matt Smiciklas, co-owner of Boarding School Games, talks about the new Las Vegas business that he co-owns with Emily Labejof. Dedicated tabletop gamers can choose from more than 500 games to play for free in-store. The doors open to the public Saturday, July 20, 2019. (K.M. Cannon/Las Vegas Review-Journal) @KMCannonPhoto
Renovations at the STRAT
Analysts say the $140 million renovation project at The STRAT, formerly the known as the Stratosphere, could help the hotel-casino compete with the evolving north side of the Las Vegas Strip. (Bailey Schulz/Las Vegas Review-Journal)
SLS Las Vegas will become Sahara Las Vegas
Owner Alex Meruelo announced during a special event at the SLS Las Vegas that the hotel-casino will become Sahara Las Vegas in its next iteration. Meruelo said $150 million dollars will be spent to renovate the current property. (Heidi Fang/Las Vegas Review-Journal)
Aircraft hinge maker moves to "business friendly" Nevada
Doug Silva, president of Aircraft Hinge, Inc. in Las Vegas, makes every type of hinge for every type of airplane. Silva talks about his company and why he moved it to Nevada. (K.M. Cannon/Las Vegas Review-Journal) @KMCannonPhoto
Daytime fireworks mark the opening of Encore Boston Harbor
The opening of the $2.6 billion Encore Boston Harbor in Everett, Mass. included a three-minute fireworks show launched by Fireworks by Grucci Sunday, June 23, 2019. (Rick Velotta/Las Vegas Review-Journal) @RickVelotta
Elaine Wynn talks about the opening of Encore Boston Harbor
Elaine Wynn, co-founder and largest shareholder of Wynn Resorts, talked during opening festivities of the $2.6 billion Encore Boston Harbor in Everett, Mass. Sunday, June 23, 2019. (K.M. Cannon/Las Vegas Review-Journal) @KMCannonPhoto
People line hours ahead of opening for Encore Boston Harbor
Guests arrive as much as 17 hours early for the 10 a.m. opening of the $2.6 billion, 671-room resort in Everett, Mass. Sunday, June 23, 2019. (K.M. Cannon/Las Vegas Review-Journal) @reviewjournal.com
Allegiant Discusses Investments In Golf Course Software And Game Rooms - Video
Allegiant Discusses Investments In Golf Course Software And Game Rooms.
Crews working 24/7 to complete Circa downtown - VIDEO
Owner Derek Stevens goal is to open the doors to the 1.25 million-square-foot project by December 2020. (Michael Quine/Las Vegas Review-Journal)
Golden Knights Marc-Andre Fleury sells Las Vegas home - VIDEO
Golden Knights goaltender Marc-Andre Fleury has sold his custom home Southern Highlands home in Las Vegas for $2.3 million.
Las Vegas Strip resorts slow to welcome Alexa, Google Home Hub
Alexa, where are you? Smart home and hospitality technology was big at CES in early January. Amazon and Google promoted their voice-activated speakers Alexa and Google Home Hub. Hospitality executives have called the speakers the industry’s future. Yet for all the hype, the revolution is unfolding at a cautious pace on the Strip as well as in other major U.S. hospitality markets. Hotels are focusing their consumer-facing technology investments on adding streaming capabilities, like Netflix, and enhancing their mobile apps, a December report by Hospitality Technology showed. Voice-enabled technology is 10th on that priority list.
What is MGM 2020
MGM Resorts International announced its MGM 2020 plan in January, The plan would improve cash flow by $200 million annually by the end of 2020 and an additional $100 million by the end of 2021. 1,070 jobs were cut as part of the cost-cutting initiative. 881 of those were Las Vegas employees, mostly in management or mid-management positions. Jim Murren
What is MGM 2020
MGM Resorts International announced its MGM 2020 plan in January, The plan would improve cash flow by $200 million annually by the end of 2020 and an additional $100 million by the end of 2021. 1,070 jobs were cut as part of the cost-cutting initiative. 881 of those were Las Vegas employees, mostly in management or mid-management positions. Jim Murren
Find next-level experience
One minute, you’re just trimming hedges and shooting the breeze with your neighbor. But then he brings up Vegas and you’re thinking about the incredible meals, world-class hotels, pools inside of pools and unparalleled entertainment. You’re thinking about iconic artist residencies like Aerosmith. Priorities take shape. Vegas first, lawn and everything else, second. Just like that, Vegas Changes Everything. (Visti Las Vegas/Youtube)
Vegas Changes Everything
A weekend getaway is nice for anyone, but a weekend getaway in Vegas ... that’s a next-level experience with shows, clubs, spas and more. With a chance to see iconic artist residencies like Gwen Stefani, you might just find yourself going from pushing your child on a swing, to pushing back a birthday party. See how Vegas Changes Everything. (Visit Las Vegas/YouTube)
THE LATEST
Alibaba co-founder to pay $3.4B for rest of Nets, arena, say sources

The co-founder of Alibaba has agreed to buy the remaining 51 percent of the Brooklyn Nets and Barclays Center from Russian billionaire Mikhail Prokhorov. Two people with knowledge of the details tell The Associated Press the deals worth about $3.4 billion.