The next G7 meeting could bring a new era of tighter crypto regulations as members gear up for a joint crypto regulatory framework.
A March 25th report by Kyoto news agency claims that leaders from the seven biggest democracies – the United States, Japan, the United Kingdom, France, Germany, Canada, and Italy – together with the European Union will work on strengthening cryptocurrency oversight.
It is reported that the matter will be discussed during the meeting of central bankers and finance ministers in May 2023.
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The meeting aims to address potential risks that crypto poses to the global financial system. It will also outline strategies to enhance transparency in the crypto industry and protect consumers. The meeting will come just days before the 48th G7 Summit set to be held in Hiroshima, Japan.
This move follows the recent turmoil in the crypto industry and the banking sector, especially in the United States. The recent fall of FTX in November 2022, which had a ripple effect on the entire crypto industry, exposed the risk of poor governance and lack of proper oversight of the sector.
The US financial sector has also been hit by several collapses of the crypto-friendly banks – Silvergate Bank, Silicon Valley Bank, and Signature Bank.
Some G7 members have already taken individual steps to regulate crypto activities and assets within their jurisdictions.
Japan has a regulatory framework, while the United Kingdom is still developing its regulatory policies for digital currencies. The EU is also working on a regulatory framework, Markets in Crypto-Assets (MiCA), which is expected to come into force in January 2024.
The US is currently using its existing financial regulations on cryptocurrencies, with reported plans to develop a crypto regulatory framework. Canada categorizes cryptocurrency under assets.
The International Monetary Fund (IMF), the Financial Stability Board (FSB), and the Bank of International Settlement (BIS) are also making efforts to develop standards for digital assets. The Group of the G20 will deliver recommendations on regulations and supervision of crypto assets and markets by July and September.
