According to the G7, monitoring, regulation and supervision of cryptocurrencies are essential to support responsible innovation in this industry.
The Group of Seven (G7), a political forum comprised of finance ministers and central bank governors from the United States, Canada, Germany, France, Italy, Japan and the United Kingdom, has reiterated its support for the Financial Action Task Force (FATF) initiatives to oversee the cryptocurrency industry.
At its latest meeting in Niigata, Japan, the G7 said that monitoring and supervising transactions involving crypto assets will ensure the health of markets and the security of investors and users.
The forum reiterated the need to create appropriate regulation to mitigate the potential risks that exist in the crypto industry and urged its leaders to implement these regulations to lead by example.
Global regulation of cryptocurrencies is a priority, says G7
On the initiatives of the FATF to supervise the cryptocurrency industry, the G7 stated that it will continue to support the measures of the international organization, especially, the application of the Travel Rule to P2P transactions of cryptoassets.
This controversial rule would require cryptocurrency service providers to report any transaction that exceeds the $3.000 threshold, according to the U.S. Department of the Treasury’s Financial Crimes Enforcement Agency (FinCEN). If the rule is approved, crypto-asset financial service providers would be required to report crypto transactions to law enforcement agencies, along with personal information about the sender and receiver of the transaction, such as name, address, amount, and account information.
On the other hand, the G7 stated that next month, the Financial Stability Board (FSB), which has been analyzing the impact of activities with cryptoassets, will finalize its high-level recommendations for this market. The G7 asked this Council, in May of last year, Prioritize the creation of global regulation for cryptocurrencies amid the devastating collapse of Terra, which caused millions in losses to investors and holders of LUNA and UST.
During the meeting, G7 members also discussed central bank digital currencies (CBDCs), which the forum said can play a key role in the global financial and payments system. The application of regulations to stablecoins and the decentralized finance (DeFi) ecosystem was also on the table at the Niigata meeting.
Cryptocurrencies on the radar of regulators
This year, regulators have seen increasing interest in overseeing cryptocurrencies as the industry recovers from the 2022 bear market and continues to grow and expand.
However, while in jurisdictions such as the United States regulators are undermining innovation, others such as Europe are adopting more favorable regulations for the development of cryptocurrencies.
Recently, MEPs approved the MICA (Markets in Crypto Assets) Act, which will establish a favourable regulatory environment for cryptocurrency companies to legally operate in the region, while ensuring transparency and security for investors and users of crypto-asset services.
Continue reading: How will MiCA help Europe become a more crypto-friendly destination?
