G7 Finance Leaders Call for Swift and Comprehensive Crypto Regulation – The G7 finance ministers and central bank governors have called for crypto assets to be regulated quickly and comprehensively. The G7 decision came in the wake of recent crypto market volatility, which saw the cryptocurrencies LUNA and UST crash.
On May 18–20, finance ministers and central bank governors from the Group of Seven (G7) industrialized nations gathered in Bonn and Königswinter, Germany. Following the recent market upheaval and the collapse of cryptocurrency terra (LUNA) and algorithmic stablecoin terrausd (UST), one of the things they discussed was the regulation of crypto assets.
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“The G7 supports the Financial Stability Board’s (FSB) work to observe and discuss financial stability risks arising from all forms of crypto-assets, and welcomes increased global cooperation to resolve regulatory challenges associated with the use of crypto-assets, including in cross-border payments,” according to the communique summarizing the finance leaders’ key decisions.
The finance ministers of the G7 added:
“In wake of contemporary market turbulence, the G7 urges the FSB to speed up the development and administration of comprehensive and consistent crypto-asset issuer and service provider regulation.”
The FSB will work on crypto regulation “in close conjunction with international standard-setters” with the goal of holding crypto-assets, including stablecoins, to the same norms as the rest of the financial system, according to the communiqué.
“In particular, the G7 urges for the FATF’s travel rule to be implemented quickly, as well as better disclosure and regulatory reporting, for example, on reserve assets underpinning stablecoins,” the finance chiefs stated, adding:
“We reaffirm that no global stablecoin project should go live until it meets all necessary legal, regulatory, and supervision criteria through appropriate design and adherence to applicable standards.”
The communique concludes, “The G7 remains committed to the highest regulatory standards for global stablecoins, based on the concept of same activity, same risk, same regulation.”
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Following the fall of LUNA and UST, a number of countries have asked for the regulation of crypto assets, particularly stablecoins, to be implemented as soon as possible.
Treasury Secretary Janet Yellen told Congress last week that regulating stablecoins is necessary and urgent. She specifically addressed Terrausd’s fall. This week, the UK government confirmed its resolve to regulate stablecoins.