G7 Report: Bitcoin has failed as a means of payment or store of value

A report from the Group of Seven (G7) indicates that so far, cryptocurrencies including Bitcoin have failed to provide a "reliable and attractive" means of payment or store of value.

The G7 is a group composed of the economies of France, the United States, Japan, Canada, Italy, Germany, and the United Kingdom. They recently released their final report on stablecoins.

The group acknowledges that the current remittance systems under traditional financial systems are slow and costly, and a globally accepted stablecoin could address some of these issues. However, they also recognize that stablecoins come with significant risks and will face many challenges. The G7 states:

Cryptocurrencies like Bitcoin are not a solution as they have scalability limitations, complex user interfaces, and still face governance, regulatory, and other challenges. Therefore, for some investors, crypto assets are more of a highly speculative asset class rather than a tool for payments.

The organization points out that there is no international consensus on stablecoins, and in reality, exchange rates are not stable. However, since stablecoins do not require third parties for sending and receiving, they may be more convenient for the public.

According to a report, the G7 also emphasizes that stablecoins, as tools for payments and storing value, should be issued by entities that comply with regulations. The group states:

No stablecoin project should begin operations globally until appropriate design and full resolution of legal, regulatory, and various risks have been addressed.

In response to this, the Libra project, which is dedicated to overcoming regulatory issues and issuing stablecoins, has responded to the G7 report, stating:

Libra stablecoin will be "transparent and operate in cooperation with regulatory authorities." We are designing to comply with existing regulations and with the utmost principle of not disrupting the digital asset space.

In their report, the G7 further suggests that governments worldwide should develop a roadmap to improve efficiency and reduce the costs of financial services and payments. Additionally, the group has specific guidance on the recently mentioned central bank digital currencies (CBDCs):

Central banks of various countries should issue Central Bank Digital Currencies (CBDCs) individually or collectively based on the costs and benefits within their respective jurisdictions.

As reported by ABM, the digitization of currencies has become a global trend. Recently, U.S. lawmakers sent an open letter to Federal Reserve Chair Jerome Powell urging the development of a national digital currency, stating that the demand for a digital dollar is "imperative."

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