G7 Finance Leaders Urge for Swift and Comprehensive Crypto Regulation
The G7 Finance Ministers and Central Bank Governors have called for a swift and comprehensive regulation of crypto-assets. The G7 decision followed the recent crypto market disruption, including the collapse of cryptocurrencies LUNA and UST.
The Finance Ministers and Central Bank Governors from the Group of Seven (G7) industrialised nations convened in Bonn and Königswinter, Germany, on May 18–20.
Among the issues they discussed was the regulation of crypto-assets following the recent market upheaval and the collapse of cryptocurrency terra (LUNA) and algorithmic stable coin terrausd (UST).
“The G7 supports work by the Financial Stability Board (FSB) to monitor and address financial stability risks arising from all forms of crypto-assets and welcomes increasing global co-operation to address regulatory issues associated with the use of crypto-assets, including in the cross-border payments,” according to the communique outlining the finance leaders’ key decisions, published on Friday.
The G7 Finance Ministers added:
"In the light of the recent disruption in the crypto-asset market, the G7 urges the FSB … to advance the swift development and implementation of consistent and comprehensive regulation of crypto-asset issuers and service providers."
The FSB will work “in close coordination with international standard-setters” on crypto regulation “to hold crypto-assets, including stable coins, to the same standards as the rest of the financial system,” the communique further details.
“In particular, the G7 calls for rapid implementation of the Financial Action Task Force (FATF) ‘travel rule’ and stronger disclosure and regulatory reporting, for instance, as regards reserve assets backing stable coins,” the finance leaders continued, adding:
"We reaffirm that no global stable coin project should begin operation until it adequately addresses relevant legal, regulatory and oversight requirements through appropriate design and by adhering to applicable standards."
“The G7 remains committed to high regulatory standards for global stable coins, following the principle of the same activity, same risk, same regulation,” the communique concludes.
Following the collapse of LUNA and UST, several countries have independently called for urgent regulation of crypto assets, particularly stable coins.
In the U.S., Treasury Secretary Janet Yellen told Congress last week that it is important and urgent to regulate stable coins. She mentioned the fall of the terrausd by name. The U.K. government also reaffirmed its commitment to regulate stablecoins this week.
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