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G7 Countries set Date for global crypto regulation

  • April 17, 2023
  • 3 min read
G7 Countries set Date for global crypto regulation

The intercontinental political forum comprising the world’s seven biggest economies, known as G7, is planning rigid rules on the crypto industry. The final version of the framework should be ready by July 2023 while G7 nations discuss key elements in Washington.

As reported in the Japanese media, Canadian, French, German, Italian, Japanese, British, and American authorities all intend to join forces to design global rules for the crypto sector. Consumer protection as well as increasing transparency will be among the primary focuses of the legislation.

These nations believe that the industry needs hasty actions and are blaming poor governance and lack of strict supervision behind recent events. FTX, a former crypto giant went from a net worth of over $30 billion to filing for bankruptcy in what many call a fraudulent scheme.. Whether or not it was a scam, the collapse lost investors billions.

Officials also expressed concerns following the recent banking collapse in America Silicon Valley Bank (SVB) and Signature Bank who both served a number of crypto clients revealed liquidity difficulties and regulators shut them down. The SVB filed for bankruptcy protection to give itself time to restructure its operations and find a way amid the chaos. First Citizens BancShares Inc agreed to acquire it as it bought $72 billion of its assets at a discount price of $16.5 billion.

With all of these events in mind, the G7 will discuss the specifics of the future legislation at a meeting of finance ministers and central bankers in May. The authorities will also comment on such policies at another assembly in Washington in June along with officials of the 20 largest economies. The final version of the bill is expected in July.

Different countries have adopted different domestic policies towards crypto. Last year, Japan relaxed its restrictions on the crypto sector. This includes plans to allow investors in the country to trade certain stablecoins issued overseas on local platforms. Others in the region, including Hong Kong and South Korea, have also announced new approaches to the industry along with metaverse initiatives to promote the efficiencies and benefits of the new asset class.

On the other hand, American financial regulators have begun to crack down on local crypto trading platforms, threatening fines and legal action against digital asset stalking services. They allege that they violate the nation’s security laws.

Finally, the International Monetary Fund (IMF), in an action plan released in February, said that countries should not grant cryptocurrencies official currency or legal tender status. They cite risks to monetary stability.

 

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