Linda Lim CHANTILLY, July 17 -- The Group of Seven industrialized nations started a two-day financial meeting Wednesday in France, focusing on effective measures to regulate Facebook Inc.'s proposed digital currency Libra to prevent potential money laundering and terrorist financing. The G-7 finance ministers and central bank governors are also expected to discuss ways to reform global corporate tax rules amid criticism that big internet companies get away without paying their fair share of taxes as they can book profits in low-tax jurisdictions. The meeting came as regulators, lawmakers and central bankers are scrutinizing Facebook's project -- unveiled just last month -- to create a crypto currency-based retail payments system in a move that critics say could affect the global financial system and challenge the role of the dollar as the world's main reserve currency. Speaking to reporters ahead of the meeting in Chantilly, north of Paris, Bank of Japan Governor Haruhiko Kuroda sought close international coordination in drawing up regulations for Libra and crypto currency 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 a significant impact if the project were to be implemented "on a huge platform." He was referring to the social media giant's global reach with its user base of 2.7 billion, about a third of the world's population. The BOJ chief said that together with measures for financial stability, antitrust and privacy issues could also be part of regulations. Kuroda and Finance Minister Taro Aso are representing Japan at the gathering, which also brings together their counterparts from Britain, Canada, France, Germany, Italy, the United States and the European Union. 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. Mnuchin said President Donald Trump's administration has "very serious concerns" that Libra, which Facebook plans to launch as early as next year, could be used for unlawful activity such as money laundering and financing terrorism. France, which holds this year's G-7 presidency, has launched a task force to study how central banks can regulate Libra and other cryptocurrencies to prevent money laundering and ensure consumer protection and financial system stability. The G-7 also plans to discuss 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 Inc. in a revamp of cross-border tax rules proposed by the Organization for Economic Cooperation and Development. But it is not known whether France will 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. Customarily, the G-7 will assess the state of the world economy and look into measures to mitigate downside risks to global growth such as trade tensions between the United States and China. Federal Reserve Chairman Jerome Powell has signaled the U.S. central bank will likely cut interest rates in late July for the first time in 11 years, given uncertainties about trade policy and the world economic outlook. China's economic growth slowed to 6.2 percent in the April-June quarter, the weakest pace in at least 27 years, as Trump sharply raised tariffs on Chinese imports in May to pressure Beijing into altering what Washington says are unfair trade practices. The G-7 finance ministers and central bankers are not planning to issue a joint statement after the meeting, but French Finance Minister Bruno Le Maire is expected to release a summary of discussions, according to Japanese delegation sources.
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