The Group of Seven industrialized nations on Wednesday called for urgent regulatory measures and other types of action to address "important concerns" sparked by Facebook Inc.'s proposed digital currency Libra, French Finance Minister Bruno Le Maire said.
The call, made on the first day of a two-day meeting of the G-7 finance ministers and central bank governors in Chantilly, north of Paris, cast doubt over the social media giant's plan to create a cryptocurrency-based payments system as early as next year.
"The overall mood around the table was clearly one of important concerns about the recent Libra announcements," Le Maire told reporters, alluding to potential risks surrounding the Libra project such as money laundering and terrorist financing.
There was "a shared view that action is needed urgently," he said, without providing details.
Japanese Finance Minister Taro Aso said G-7 members broadly expressed skepticism about the Libra project, which Facebook unveiled just last month, and he questioned its reliability.
"Users would find (Libra) useful in making international money transfers because it would be cheaper than the current system. But whether it will be reliable is another issue," Aso told journalists separately.
(Japanese Finance Minister Taro Aso)
Aso said he told his G-7 counterparts from Britain, Canada, France, Germany, Italy and the United States plus the European Union of the need for a "timely response" by authorities such as applying appropriate regulations.
The ministers and central bankers have received an interim report from a G-7 working group on the challenges posed by Libra and other cryptocurrencies, and a full report is expected when the World Bank and the International Monetary Fund gather for annual meetings in October, according to a French delegation source.
Regulators, lawmakers and central bankers have been scrutinizing Facebook's project, with critics saying it could affect the global financial system and challenge the role of the dollar as the world's main reserve currency.
Speaking on the margins of the Chantilly meeting, Bank of Japan Governor Haruhiko Kuroda sought close international coordination over regulations for Libra and cryptocurrency payments.
"If (Libra) were to be used as a means of payments, it could well affect the economy and finance," Kuroda said, calling for necessary regulations to curb any significant impact if the project were to be implemented "on a huge platform."
He was referring to Facebook's global reach with its user base of 2.7 billion, about a third of the world's population.
U.S. Treasury Secretary Steven Mnuchin has warned that Libra and other cryptocurrencies are a "national security issue," and that digital asset providers must be subject to government regulations and oversight just like any bank.
(Bank of Japan Governor Haruhiko Kuroda speaks to reporters ahead of the meeting)
Apart from Libra, the G-7 discussed ways to reform global corporate tax rules amid criticism that big internet companies such as Facebook and Apple Inc. get away without paying their fair share of taxes as they can book profits in low-tax jurisdictions, according to Japanese officials.
The G-7 exchanged views on a French call for minimum corporate taxation as part of efforts to appropriately tax information technology giants such as Google LLC, Amazon.com Inc., Facebook and Apple in a revamp of cross-border tax rules proposed by the Organization for Economic Cooperation and Development.
A specific rate would emerge as early as next year in talks taking place at the Paris-based OECD.
"On a minimum corporate tax, I am hopeful that we can anchor the principle of the need for such a global minimum corporate tax for the first time tomorrow," the French finance minister said.
But it was not known whether France would win G-7 backing for its initiative, partly because the United States has criticized Paris' new tax on major internet companies' revenue in the country for "unfairly" targeting American companies.
As is customary, the G-7 assessed the state of the world economy and maintained the outlook that global growth will pick up toward next year, according to the Japanese finance minister.
Aso said trade tensions between the United States and China will continue to pose a downside risk to the global economy, and that inward-looking policy would not benefit any country.
China's economic growth slowed to 6.2 percent in the April-June quarter, the weakest pace in at least 27 years, as U.S. President Donald Trump sharply raised tariffs on Chinese imports in May to pressure Beijing into altering what Washington says are unfair trade practices.
A replacement for Christine Lagarde as managing director of the IMF was not on the agenda in Chantilly, but many G-7 delegates discussed it informally during coffee breaks, a senior Japanese Finance Ministry official said, without elaborating.
The Washington-based lender said Tuesday Lagarde will step down on Sept. 12, after European Union leaders nominated her to succeed Mario Draghi as president of the European Central Bank.