The G7 is taking steps to address concerns over the lack of regulation in the cryptocurrency industry. According to reports, the G7 is planning to promote tougher regulations of the crypto sector during the 49th G7 summit, which is scheduled to take place in Hiroshima, Japan, in May 2023. The goal of this plan is to increase transparency and consumer protections.
The move comes in response to concerns about the potential risks that crypto assets pose to the global financial system. The collapse of FTX, a major cryptocurrency exchange in November, exposed the poor governance of the industry and sent shockwaves through financial markets.
The G7 is seeking to establish global standards for virtual assets and hopes to take the lead in formulating these standards. Japan, which already has cryptocurrency regulations, and other members such as Britain, Canada, France, Germany, Italy, the United States, and the European Union are seeking to state their collective efforts in a leaders’ declaration.
The G7 is planning to 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.
The Financial Stability Board (FSB), headquartered in Switzerland, released recommendations in October last year for creating a regulatory framework, stating that crypto assets should also be subject to regulations for commercial bank activities. The FSB plans to announce its final version of the framework in July this year.
The International Monetary Fund (IMF) has also outlined key elements for each country to consider in the development of comprehensive and coordinated rules following the spread of crypto. Among other guidelines, IMF directors have generally agreed that crypto assets should not be granted official currency or legal tender status.