Representatives of seven advanced economies signaled their commitment to follow the norms set by the standard setters FSB and IMF on cryptocurrencies and central bank digital currencies.
G-7 discusses regulation of cryptocurrencies
The G7 intergovernmental political forum signaled its commitment to implement the Financial Stability Board (FSB) future norms for regulating cryptoassets and the International Monetary Fund (IMF) recommendations on central bank digital currencies. The group’s finance ministers and central bank governors announced that they discussed the issue of regulation for cryptocurrencies at a meeting in Niigata, Japan, ahead of next week’s G-7 summit. Japan is hosting the summit this year. Japanese Prime Minister Fumio Kishida said the G-7 leaders will voice their joint support for tougher crypto rules.
As head of the G-20, India is pushing for globally coordinated crypto rules. In February, the group said that future global crypto norms will be based on a new synthesis document jointly produced by the IMF and FSB. In addition, the G-7 stated that it will follow the standards set by the FSB. In the announcement, he highlighted the following:
We look forward to finalizing the FSB’s high-level recommendations by July 2023. We are committed to implementing effective regulatory and supervisory frameworks for stablecoin regulations, as well as operations and markets for cryptocurrencies, consistent with the FSB’s recommendations and the standards and guidelines established by the SSBs (Standard setting bodies).
The G-7 looks forward to this development
The Finance Ministers also said they support the G-7’s Financial Action Task Force (FATF) efforts to accelerate global implementation of the travel rule, which mandates the sharing of information on transfers of funds between financial institutions. The global money laundering watchdog is expected to publish a progress report on the implementation of the travel rule. This is a development the G-7 is looking forward to “in light of the growing threats from illegal activity.”
cryptocoin.comAs you follow, the G7 previously said it will help developing countries issue CBDCs. In addition, the G-7 will look at the IMF’s recommendations on CBDCs to be released later this year. The G-7 consists of the United States, Britain, Canada, France, Germany, Italy and Japan. The group has also invited representatives from the European Union, Australia, India and some other countries this year.
‘Travel rule’ for cryptocurrencies
The G7 wants the “Travel Rule” for cryptocurrencies to be implemented quickly. To this end, he met in Japan to discuss CBDCs and crypto regulations. In a statement summarizing the discussions, the committee noted that more research is needed to ensure they are based on “transparency, the rule of law, sound economic governance, cybersecurity and data protection.” With this warning, he reiterated his support for the development of CBDCs.
In the statement, the International Monetary Fund’s (IMF) “CBDC Handbook” development work was described as “satisfying”. It was also stated that the G7 committee is looking forward to the first set of outputs to be published at the 2023 World Bank Group and IMF Annual Meetings to be held in Marrakech, Morocco on October 15.
Committee members also discussed the controversial ‘Travel Rule’, which requires any financial institution that processes cryptocurrencies over $3,000 to disclose the sender’s name, address and account information. Pursuant to the Communiqué, the committee clarified its stance as follows:
We support the Financial Action Task Force’s (FATF) initiatives to accelerate global implementation of the FATF Standards on virtual assets, including the ‘travel rule’, and its work on emerging risks, including DeFi regulations and peer-to-peer transactions.
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