G7 call for crypto regulation: That is why it is now necessary

The G7 are calling for crypto regulation and will soon work together to draft comprehensive legislation. Interventions are necessary in order to create more consumer protection through better transparency, it is said. Secretly, the states may fear an increasing loss of importance of fiat money, which could manifest itself through the current banking crisis. The Basel-based Financial Stability Board is in charge.

G7 call for crypto regulation

The G7 are calling for global crypto regulation, reports Kyodo News , citing insider statements. In mid-May, the topic is to be discussed extensively by the finance ministers and central bankers of the participating countries. Only a few days later, the G7 Summit is to take place in Japan.

The members Great Britain, USA, France, Japan, Germany, Canada, Italy and the European Union are interested in working together on a regulatory solution in order to achieve the best possible result through cooperation.

The G7 believe that cryptocurrencies could pose a threat to the financial stability of entire economies. The crypto industry was already expecting increasing legislative interventions, as there have been repeated sharp slumps in the industry over the past year.

The FTX crash , which was based on a scam, made particularly big headlines . New developments may further increase government aversions to crypto. Several banks ran into financial difficulties in March 2023. The major Swiss bank Credit Suisse is also affected and is consequently taken over by UBS .

Although the banks also included Silvergate and Signature Bank, both of which had a significant portion of their business from crypto exchanges, the crypto market exited the event on a big note .

That is why crypto regulation is necessary

So far, only one G7 member state has successfully passed crypto regulation. This is Japan . Ironically, the Land of the Rising Sun has been rowing back from a very strict anti-crypto course since the end of last year and would like to give the industry in the country more freedom.

Other states already have laws that regulate the crypto industry, but are not always put into practice. An example of this is the German Crypto Value Transfer Ordinance.

Various political bodies in the USA are currently working on a legal framework. Activities by the US Securities and Exchange Commission (SEC) have also been noticed since February. This is trying to put the crypto industry in its place.

Despite different regulatory stages, there is unity among the G7 on the need for comprehensive legislation. Above all, it should improve the transparency of the crypto industry in order to avoid cases like Celsius or FTX in the future.

The regulation is necessary in order to establish consumer protection, which has not been adequate up to now due to the leaky legal situation.

In 2016, crypto companies came into the focus of the authorities for the first time. At that time, the demand for KYC and AML measures was established worldwide. Despite arguments to the contrary, these steps were not taken to protect consumers .

The Basel-based international organization FSB ( Financial Stability Board ) is likely to have a significant influence on the regulation of the G7. Last October, the FSB presented a first draft of legislation. The full version of the draft should be ready in July.

The Financial Stability Board recently criticized the state of centralized stablecoins . In this field, legal intervention is particularly important.

The G20 are also looking at cryptocurrencies at a meeting in mid-April, the anonymous source explains. The 20 largest economies meet at a conference in Washington.