The Group of Seven (G7) will look to enforce stricter regulations for the crypto industry following the several crypto-related incidents that affected the global economy in 2022.
The G7 is an informal grouping of seven of the world’s advanced economies, including Canada, France, Germany, Italy, Japan, the United Kingdom, the United States, and the European Union.
Discussion about the implementation of these regulations is set to be the major highlight of the next G7 summit slated to hold in May 2023 in Hiroshima, Japan.
During the summit, nations will table policies directed at improving crypto transparency and increasing consumer protection while also addressing likely dangers that can negatively affect the performance of the global financial system.
Many cryptocurrency enthusiasts have memories of the market’s unfavourable run in 2022 due to the collapse of major crypto projects and firms. The Terra-Luna debacle and the bankruptcy of the FTX exchange in November 2022 remain pointers to the need for better regulation.
The collapse of crypto-friendly banks such as the Silicon Valley Bank and Signature Bank a few weeks ago created more panic among crypto enthusiasts. Many crypto investors with assets stored feared that a new run of losses would wreck the market again.
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“The officials say that the G7 will accelerate the pace of related discussions toward a meeting of finance ministers and central bankers in mid-May, just days before Japanese Prime Minister Fumio Kishida hosts this year’s summit in Hiroshima. While the legal status of virtual assets and rules about them vary by country, the G7 is seeking to establish global standards,” Finbold reported.
Although prior to this, some countries have begun a charge to ensure proper crypto regulations are set. Japan recently announced that crypto assets are properties under the Payment Services Act (PSA). As a result, there is a mandatory registration process for crypto exchanges that want to operate within the country. Also, crypto exchanges must comply with the rules set in Anti Money Laundering/Combating the Financing of Terrorism (AML/CFT) law.
Countries like South Africa and Belgium have launched policies mandating crypto ads to include risks attainable with crypto trading. Similarly, the United Kingdom has indicated its desire to regulate the space further
G7 is the latest global body to call for crypto market regulation
The Financial Stability Board (FSB) released a set of recommendations on the international regulation of crypto-asset activities. The document highlighted challenges common to establish a firm and a well-detailed regulatory approach. While it covered these varying challenges, it revealed attainable policy initiatives at the jurisdictional and international levels.
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Ahead of the G7 meeting scheduled for May, other global bodies have expressed their opinions on cryptocurrency, with most calling for stricter regulations.
Another global organization striving hard to improve crypto regulation is the International Monetary Fund (IMF). IMF underscored crucial elements for each country to take note of in establishing a proper and adequate guide considering the swift popularity of cryptocurrency.
The IMF believes crypto assets should not be approved as an official currency or legal tender status. Also, they posit that banning crypto is by far a poor option. However, well-informed, transparent, and firm restrictions should be created as determined by domestic policy objectives.
IMF admits that in the coming years, it will work closely to support the regulatory work under the leadership and guidance of established bodies.
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