Finance leaders at the G7 (Group of Seven) forum called for rapid and comprehensive regulation of crypto assets. The call for rapid regulation comes following the recent crash witnessed in the crypto market – the crash of the cryptocurrencies UST and LUNA.
The 2-day gathering from May 18 to May 20, 2022, saw world finance leaders discussing global economic conditions. The convention included central bank governors, finance ministers, IMF (International Monetary Fund) leaders and other financial leaders from industrialized nations.
Some crypto highlights from the G7 report:
- The G7, in association with the Financial Stability Board or the FSB, is working toward the goal of monitoring the risks of financial stability arising from crypto assets of all types. The G7 – FSB partnership extends to addressing such risks.
- The G7 report cites the recent downtrends in the crypto market.
- The report highlights the recent downturn of the crypto market to stress the need for a regulated crypto atmosphere.
It stated that there is an immediate need to speed up not only the development but also the implementation of crypto laws that are “consistent and comprehensive”. The report specifies issuers of crypto-assets and service providers as segments to be under purview of the proposed crypto regulatory laws.
The report also cited that the goal of the regulation is to set the same regulatory standards for crypto-assets including stablecoins as those for conventional financial assets and systems.
- The G7, in particular, urged the FATF – Financial Action Task Force – to implement its Travel Rule swiftly. The FATF Travel Rule aims to prevent money laundering by eliminating anonymity from crypto transactions.
If implemented, the Travel Rule would require sharing of data pertaining to senders and receivers in crypto transactions. Such data-sharing helps regulators detect frauds and money laundering.
- · Financial leaders at the Forum also urged for the swift implementation of enhanced disclosure reporting terms for crypto-assets. Citing stablecoins as an example, the leaders stressed that there could be better regulatory laws for disclosures pertaining to revenue assets in the stablecoins segment.
The report particularly stressed the need to prevent any stablecoin from going active until the crypto-asset meets essential regulations designed for the purpose.
The G7 concluded its report by reinforcing its commitment to the establishment of strictest regulatory standards for handling the global stablecoin market.
The details of the G7 report are significant given the recent appeals from many countries to regulate crypto-assets following the slump in UST and LUNA value.