G-7 to Push For Tighter Cryptocurrency Regulations

G-7 to Push For Tighter Cryptocurrency Regulations

At their next conference in May, leaders from the G7 nations—Japan, the United States, the United Kingdom, Canada, France, Germany, and the European Union—are expected to advocate for stricter rules on cryptocurrencies throughout the world. According to Kyoto News Agency, the leaders will lay up a joint plan to improve consumer safeguards, expand market transparency for cryptocurrencies, and address possible threats to the world financial system. 

While some G7 members already regulate cryptocurrencies, others are gradually developing their crypto frameworks. For example, Japan already regulates cryptocurrencies, while the European Union’s Markets in Crypto-Assets (MiCA) regulation is set to go into effect in 2024.

Canada treats digital assets as securities, and the United States currently applies existing financial regulations, with some anticipating a crypto regulatory framework from lawmakers in the coming months. The United Kingdom is also developing its crypto framework, with a special category for crypto assets on tax forms recently introduced, as well as plans for a digital pound.

Parallel efforts towards standards for digital assets are also being made by the Financial Stability Board (FSB), the International Monetary Fund (IMF), and the Bank for International Settlements (BIS), the group of the 20 biggest economies in the world. 

In February, the G20 announced that recommendations on the regulation, supervision, and oversight of global stablecoins, crypto assets activities, and markets are scheduled to be delivered by July and September. It is unclear, however, what the overall tone of the recommendations will be.

The IMF has advocated for countries to adopt greater crypto regulation while working on an interoperable central bank digital currency platform to connect multiple global CBDCs and enable cross-border transactions. 

However, the IMF released an action plan on crypto assets in February, urging countries to abolish legal tender status for cryptocurrencies. The fund’s opposition to crypto as legal tender is well known, especially since El Salvador adopted Bitcoin as its official currency in September 2021.