G7 finance ministers and central bank governors have called for swift and comprehensive regulation of crypto assets. The G7 decision followed recent turmoil in the crypto market, including the collapse of cryptocurrencies LUNA and UST.
G7 countries call for rapid, comprehensive regulation of crypto assets
From May 18th to 20th, the finance ministers and central bank governors of the industrialized countries of the Group of Seven (G7) met in Bonn and Königswinter.
Topics discussed included the regulation of crypto assets following the recent market turmoil and the collapse of Cryptocurrency Terra (LUNA) and Algorithmic stablecoin Terrausd (UST).
“The G7 supports the work of the Financial Stability Board (FSB) to monitor and address financial stability risks arising from all forms of crypto-assets and welcomes increasing global collaboration to address regulatory issues related to the use of crypto-assets address, including in cross-marginal payments,” read the communiqué released on Friday, which summarizes the key decisions made by finance leaders.
The G7 finance chiefs added:
In the light of the recent turmoil in the crypto asset market, the G7 urges the FSB to … advance the rapid development and implementation of consistent and comprehensive regulation of crypto asset issuers and service providers.
The FSB will work on crypto regulation “in close coordination with international standard-setters to keep crypto assets, including stablecoins, to the same standards as the rest of the financial system,” the communiqué continues.
“In particular, the G7 is calling for swift implementation of the Financial Action Task Force’s (FATF) ‘travel rule’ and stricter disclosure and regulatory reporting, for example in relation to reserve assets backing stablecoins,” the financial leaders continued, adding:
We affirm that no global stablecoin project should commence operations until it adequately meets relevant legal, regulatory and regulatory requirements through appropriate design and compliance with applicable standards.
“The G7 remains committed to high regulatory standards for global stablecoins and adheres to the principle of equal activity, equal risk and equal regulation,” the communiqué concludes.
Following the collapse of LUNA and UST, a number of countries have independently called for urgent regulation of crypto assets, particularly stablecoins.
In the US, Treasury Secretary Janet Yellen told Congress last week that regulating stablecoins is important and urgent. She mentioned the case of Terrausd by name. The UK government also this week reiterated its commitment to regulate stablecoins.
What do you think of the G7 finance leaders’ call for swift and comprehensive regulation of crypto assets? Let us know in the comment section below.
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