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24 July 2019

G7 meet­ing in Chan­til­ly: fo­cus on sta­ble­coins and in­ter­na­tion­al tax pol­i­cy

At their meeting in Chantilly (France) on 17 and 18 July, the G7 finance ministers and central bank governors discussed the risks associated with stablecoins. They reiterated the importance of a fair international tax system and, for the first time, agreed on the introduction of a global minimum effective corporate tax as an explicit aim.

Olaf Scholz speaking
Source:  Xander Heinl/photothek.de

At their meeting in Chantilly (France) on 17 and 18 July, the G7 finance ministers and central bank governors agreed that stablecoins such as Libra can entail significant risks and must not be permitted to undermine existing rules. Operators need to meet the highest standards of financial regulation. The finance ministers and central bank governors believe that it is important to avoid any adverse effects on financial stability, investor and consumer protection, and the fight against money laundering and terrorist financing. If stablecoins were to become globally widespread, this would also raise monetary policy concerns. German Finance Minister Olaf Scholz stated that currencies belong in the hands of central banks and democratically elected governments. The G7 working group on stablecoins, which is coordinated by Benoît Cœuré, will submit its final report in October 2019.

Another focus of the meeting was on the challenges that digital technologies bring to the international tax system. The G7 reiterated the importance of a fair international tax system and, for the first time, identified the introduction of a global minimum effective corporate tax as an explicit aim. The rate of tax will depend on the details of the rules eventually adopted. The G7 expects initial progress on this by January 2020.

The chair’s summary issued by the French G7 Presidency also sets out the other topics discussed in Chantilly, including the global economy, inequalities within and between countries, competition and the digital economy, green finance, financing for development, and women’s digital financial inclusion in Africa.

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