Finance ministers and governors of G7 central banks have called for rapid and comprehensive regulation of cryptoassets. G7’s decision followed the recent crypto market turmoil, which included the collapse of cryptocurrencies LUNA and UST.
G7 Countries Calling for Swift, Comprehensive Regulation of Crypto Assets
The finance ministers and central bank governors from the Group of Seven (G7) industrialized nations convened in Bonn and Königswinter, Germany, on May 18–20.
Among the topics they discussed was the regulation of crypto assets following the recent market turmoil and the collapse of cryptocurrency terra (LUNA) and algorithmic stablecoin 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 cooperation to address regulatory issues associated with the use of crypto-assets, including in cross-border payments,” according to the communique summarizing the finance leaders’ key decisions, published Friday.
The G7 finance chiefs added:
In light of the recent turmoil 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 “with a view to holding crypto-assets, including stablecoins, 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 stablecoins,” the finance leaders continued, adding:
We reaffirm that no global stablecoin 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 stablecoins, following the principle of same activity, same risk, same regulation,” the communique concludes.
Following the collapse of LUNA and UST, a number of countries have independently called for an urgent regulation of crypto assets, particularly stablecoins.
In the U.S., Treasury Secretary Janet Yellen told Congress last week that it is important and urgent to regulate stablecoins. She mentioned the fall of terrausd by name. The U.K. government also reaffirmed its commitment to regulate stablecoins this week.
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