G-7 Leaders Draft Urgent Declaration on Global Crypto Rules

Leaders of the G-7 countries are issuing a joint statement on global cryptocurrency regulations, amid growing concern over the asset class’ threats to global financial stability.

The leaders of Great Britain, Japan, Canada, Germany, France, the United States and the European Union see it necessary to release a joint statement after the collapse of FTX and several American banks.

G-7 meeting to focus on consumer protection

The leaders will support stricter regulations for customer protection and greater transparency for crypto businesses. They plan to push for regulations before a finance minister and central bank meeting in Japan later this year.

The G-7 first signaled its intention in an announcement last May, and a document released last year proposed new rules following the collapse of the TerraUSD stablecoin in early May.

Of the seven most powerful nations, Japan has crypto regulations. The EU’s Markets-in-Crypto-Assets law is expected to enter the debate on April 18, 2023.

The law will introduce laws around disclosures by firms offering tokens to raise capital and introduce registration requirements, and will also introduce regulation around stablecoins, a crypto-asset whose value is tied to a single unit of fiat currency.

The United States has several bills awaiting passage in Congress. This wait comes as the securities watchdog has taken enforcement actions against companies or products they claim violate securities laws.

What crypto industry players see as a lack of commitment to create clear guidelines for crypto businesses has led many to migrate away from the US to Singapore, the UK, Dubai and the EU.

Executives ask FASB to work on travel rules

The global nature of the G-7 leaders’ meeting means they can introduce rules for the international movement of crypto. The managers work closely with the Financial Accounting Standards Board to address stability risks related to cryptoassets.

It urged the FASB summit last year “to promote the rapid development and implementation of consistent and comprehensive regulation of cryptoasset issuers and service providers, with the aim of holding cryptoassets, including stablecoins, to the same standards as the rest of the financial system.”

The leaders also called for greater action around the so-called travel rule for crypto assets.

Recently, delegates at the Financial Action Task Force plenary in Paris decided to implement new standards around the travel rule. Apparently, these rules enforce “transfer of originator and recipient information” for crypto.

These stricter enforcement standards followed the regulation of virtual assets introduced in 2019. At the time, this law implied a need to collect data on the source and destination of transfers of virtual assets.

In a recent interview with BeInCrypto, Alice Nawfal, Chief Operating Officer of Notabene, praised the EU’s approach. She said the EU had shown the most flexibility in designing the compliance aspect of the travel rule.

“They were open and moving quickly,” she said.

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