The Group of Seven (G-7) has announced plans to push for tighter crypto regulations, which could have significant implications for the global crypto industry. The group, which is made up of the world’s seven largest advanced economies, is looking to increase consumer protection and business transparency in the crypto space, according to reports familiar with the matter.
Discussions on a global framework for regulating crypto are set to speed up ahead of a mid-May meeting of central bankers and finance ministers. The upcoming G-7 summit, which will be hosted by Japan’s Prime Minister Fumio Kishida in Hiroshima, is anticipated to see members announce their collective commitment towards implementing stricter crypto regulations through a leaders’ declaration.
Japan already has some of the strictest crypto regulations in the world, and Customers of FTX Japan were among the initial recipients of refunds following the downfall of the cryptocurrency exchange.
The country’s experience in this area will likely be leveraged to help shape global regulatory frameworks.
The move by the G-7 comes after several crypto exchanges and banks collapsed, including FTX, Silicon Valley Bank (SVB), Signature Bank (SBNY), and Silvergate Bank. These failures have highlighted the risks involved in investing in crypto and underscored the need for stronger regulation.
A worldwide consensus on regulating crypto has been the focus of regulators worldwide. In October of last year, the Financial Stability Board presented suggestions for global crypto regulations, and last month, discussions on the topic were held by the Group of 20 (G-20) major economies. Furthermore, a synthesis paper outlining international crypto regulations will be submitted during the G-20 presidency of India, which is set to conclude in September of this year.
The push for tighter crypto regulation is likely to be welcomed by some in the industry, who see it as a way to increase legitimacy and reduce the risk of fraud and other illicit activities. However, others may view it as an infringement on crypto’s decentralized and unregulated nature.
As the G-7 discussions on crypto regulation continue to unfold, the industry will be watching closely to see how the world’s largest economies seek to balance consumer protection with the desire for innovation and growth in the crypto space.