The seven major industrialized countries, Canada, Germany, France, Italy, the United Kingdom, European Union, Japan, and the United States declared their plans to impose strict regulations on the cryptocurrency sector. The following step was taken with the aim of increasing their transactions in business and for consumer protection.
The 49th G7 summit will be held by the Japanese Prime Minister, Fumio Kishida between the 19th to the 21st of May 2023 in Hiroshima city. The latest G7 meeting will accelerate the discussions on the following topic before the meeting with central bankers, and finance ministers at the summit.
Why the G7 Are Planning to Impose Strict Regulations on the Crypto Sector?
While crypto assets threaten the worldwide financial system, the G7 nation leaders look forward to collaborating with the leader’s decision. The meeting was the direct result of the FTX collapse of November 2022, which sent shockwaves throughout the industry and reflected on the poor governance of the crypto industry.
Moreover, the sudden collapse of the two banks in the United States has perturbed investors. Both of them were Silicon Valley banks that dealt with the Signature Banks, and Tech Startups, serving the crypto clients.
Among the G7 nations, Japan has already formed and implemented regulations for the cryptocurrency industry. The United States and Canada are still implementing the present financial regulations. Although the legal stature and regulations of the crypto industry will differ from country to country, the G7 group is planning to take a lead in drawing up the global standards.
IMF Guidelines for Crypto Regulations
On a global level, the FSB (Financial Stability Board), based in Switzerland released a set of endorsements regarding crypto regulations last year in the month of October. The recommendation stated that for commercial bank activities, the crypto assets require structured regulations.
While the final version of recommendations is yet to be released by FSB in July 2023, the IMF (International Monetary Fund) released a policy paper in the month of February, covering every key element that must be considered by every nation while framing a comprehensive regulation for the crypto industry.
Among several other guidelines, the directors of the International Monetary Fund has also decided not to consider the cryptocurencies as the legal tender or official currencies.
Apart from discussing on the strict regualtions to be imposed on the crypto industry, the team of Central Bank governors, and finance ministers among the twenty major economies will also discuss on the issues related to the crypto industry in mid-April in Washington DC.