G7 Planned To Discuss Tougher Crypto Regulations

The Group of Seven is expected to address imposing tougher regulations on cryptocurrencies, officials familiar with the plan were quoted by Kyodo News Agency as saying.

Leaders from the United States, Italy, Japan, the United Kingdom, Canada, France, and Germany will outline a collaborative strategy for crypto to promote business transparency and consumer protections and address related potential risks to the global financial system. The G7 summit is scheduled to be held in Hiroshima in May.

The officials pointed out that the leaders of G7 look forward to declaring their cooperative efforts. They will speed up the pace of related discussions toward a meeting of finance ministers and central bankers in mid-May.

The plan comes following the collapse of FTX cryptocurrency in November last year and the instability in the banking sector in the US after the closure of Silicon Valley Bank and Signature Bank, which served Web3 startups and crypto clients.

Although the regulations of virtual and digital assets could vary from one country to another, the G7 leaders seek to formulate global standards.

Earlier this month, the International Monetary Fund (IMF) warned the G20 countries of the risks posed by the growing adaption of cryptocurrencies by their citizens.

The warning came in a report titled “Macrofinancial Implications of Crypto Assets,” in which the IMF presented countless risks to the G20 countries’ economies of the impacts of crypto adaption on their external and internal stability.

The report showed the IMF’s concern about the people’s shift from fiat to digital currencies denominated in foreign currencies, saying this could challenge the effectiveness of the monetary policies. It also pointed out that the growing adaption may affect the Global Financial Safety Net (GFSN) and capital flow stability, which badly affects the efficiency of the payment system.

“A widespread proliferation of crypto assets comes with substantial risks to the effectiveness of the monetary policy. Moreover, changes may be required to central bank reserve holdings and the global financial safety net, yielding potential instability,” the report noted.