|Group of Seven (G7)|
|Products||International regulatory forum|
The Group of Seven (G7) is a forum for the governments of Canada, France, Germany, Italy, Japan, the United Kingdom, and the United States. Group ministers meet throughout the year and the member states meet at an annual summit.
The G7 has no headquarters and no permanent staff or budget. The country that holds the presidency in a given year is the host country for the G7 summit that year and has the responsibility of paying for all costs associated with it. Currently, France holds the presidency.
In 1975 the French president Valery Giscard d’Estaing initiated the first meeting of what would become G7 at Château de Rambouillet - a commune in the metropolitan area of Paris. Leaders from six countries attended, including France, forming the Group of Six (G6). Canada joined a year later, making it the Group of Seven.
Since 1977 the leader of the European Commission has also been invited to the summits. Initially, the G7 primarily discussed macroeconomic issues and global development trends, but current political issues were later added to the agenda.
In 1994, at a summit in Naples, Russia was added to the Group of Seven (G7) countries on a guest basis and it was permanently added four years later, effectively forming the Group of Eight (G8).
Russia was suspended from the group in 2014 following the nation's illegal annexation of the Crimea region of Ukraine, causing it to go back to using the moniker G7. Three years later, in 2017, Russia announced that it would be permanently stepping away from the group. A spokesperson from the Kremlin, Dmitry Peskov, said that Russian sovereign Vladimir Putin's new priority was G20, a group of countries that includes Brazil, Mexico, Turkey, and Saudi Arabia.
In 2019, Facebook announced the development of Libra, a stablecoin designed to improve the process of executing P2P transactions across national borders. On June 18, 2019, G7 announced it would set up a high-level forum to examine the risks of such digital assets to the financial system, and how to ensure regulatory measures like preventing money-laundering. In response to the news that the social media company planned on backing Libra with hard assets like currencies and securities, Mark Carney, governor of the Bank of England, said that Libra would be considered "with an open mind" but not "an open door." Days later, French central bank governor Francois Villeroy de Galhau said that G7 will create a taskforce to study stablecoins in order to learn how best to regulate them. According to Reuters, another issue to be studied by the taskforce is custodianship of digital assets.
In October 2019, G7 and the Bank for International Settlements (BIS) released a report on their findings. The report said that stablecoins built for proprietary financial systems such as Libra “pose challenges for competition and antitrust policies” and should not be launched until all legal and regulatory risks are addressed. It also said that the creation of a global stablecoin could “lead to significant market concentration” due to “the strong network effects that initially spurred their adoption, the large fixed costs needed to establish operations at scale and the exponential benefits of access to data.”
According to press reports, the group of nations was preparing to make a similar statement regarding Libra in October 2020. The press reports noted that that the European Central Bank, which serves Germany, France and Italy, Canada and the U.K. have all embarked on their own stablecoin projects which ostensibly would compete with Libra.
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- The Group of Eight. Civil-G8.
- Backgrounder - Russia's participation in Group of Eight. People's Daily Online.
- Ukraine crisis: Russia scathing about G8 suspension as fears grow over build-up of border troops build-up. The Independent.
- Russia announces plan to permanently leave G8 group of industrialised nations after suspension for Crimea annexation. The Independent.
- Facebook’s Libra currency draws instant response from regulators. Financial Times.
- European central bankers claim oversight over Facebook’s cryptocurrency. Reuters.
- Stablecoin regulatory risks need addressing, says G7 report. Financial Times.
- Facebook's Libra must not start until properly regulated - G7 draft. Reuters.