G7 To Work Together For Tighter Regulations In The Crypto Sector

The seven largest economies may advocate for stricter cryptocurrency rules at the upcoming G7 summit, according to a March 25 report from Kyoto News Agency.

Leaders from the United States, the United Kingdom, Canada, France, Italy, Germany, and the European Union will develop a cooperative plan to strengthen consumer rights and promote crypto transparency while addressing potential threats to the global financial system, officials stated. The summit for this year is scheduled for mid-May in Hiroshima.

„The plan follows the collapse of the major cryptocurrency exchange FTX in November, which has laid bare the poor governance of the industry and sent shockwaves through financial markets.

It also comes as investors have been rattled by two sudden bank failures this month in the United States.

The two were Silicon Valley Bank, which specialized in dealing with technology startups, and Signature Bank, which served crypto clients.“ the report reads.

Japan is one of the G7 nations that already have a working cryptocurrency regulation framework, and the European Union will implement its Markets in Crypto-Assets (MiCA) regulation in 2024. The United Kingdom is progressively establishing its crypto framework, with the introduction of a dedicated category for cryptocurrency holdings on tax forms and ongoing preparations for a digital pound.

While the United States currently applies existing financial regulations to cryptocurrencies and Canada treats digital assets as securities, lawmakers are rumored to be working on a regulatory framework for cryptocurrencies, scheduled to be published for review in the near future.

The group of the 20 largest economies in the world, known as the G20, announced in February during a meeting in Bengaluru, India, that the Financial Stability Board (FSB), the International Monetary Fund (IMF), and the Bank for International Settlements (BIS) are making parallel efforts toward standardizing digital assets and putting them into clearer categories.

By July and September, regulators may publish recommendations on how to control, monitor, and oversee the markets for crypto assets, stablecoins, and related activities. However, the crypto sector eagerly anticipates what the recommendations' tone will be.

For instance, the IMF urged nations to remove cryptocurrencies' legal tender status in an action plan on crypto assets that was published in February. It is commonly known that the IMF opposes the use of cryptocurrencies as legal cash, especially in light of El Salvador's adoption of Bitcoin as its official currency in September 2021. Nonetheless, the fund has been pushing for countries to embrace stricter crypto regulations while also developing an open-source infrastructure for central banks to connect their digital currencies and facilitate international trade.