Steps were taken by different countries
Among all G7 members, Japan has already begun to regulate crypto. The EU’s Markets in Crypto-Assets regulation (MiCA) is all set to be into effect next year. The UK is slowly developing its cryptocurrency framework. They are using a special category for cryptocurrency assets on recently introduced tax forms and all plans for a digital pound in their works. Canada is treating cryptos as securities and the US recently applies their current financial regulations to cryptocurrency with a few anticipating a cryptocurrency regulatory framework from lawmakers in the upcoming months.
Efforts by FSB, IMF, and BIS
Great efforts towards standards for cryptos are made by the FSB, IMF, and BIS, the group of 20 biggest worldwide economies. They are collectively called G20. They declared it in February during a meeting that took place in Bengaluru, India. Some recommendations on the supervision, regulation, and oversight of worldwide stablecoins, activities of cryptocurrency assets, and their markets got scheduled for delivery by July and September. It is not clear, yet what the overall tone of these recommendations will be.
For example in February, the IMF release one action plan on cryptocurrency assets. They urged countries to abolish all legal tender status for cryptos. Their opposition to cryptocurrency as legal tender is popular, especially as El Salvador adopted BTC as their official currency in 2021 September. But the fund has been advocating for many countries to adopt bigger cryptocurrency regulations while working on one interoperable platform of central bank digital currency for connecting many worldwide CBDCs and enabling cross-border transactions.
G7 collaborating on stringent crypto regulation
G7 has been making plans for introducing stringent regulations on crypto. It includes increasing consumer protection and transparency. They will also address prospective risks to the worldwide financial system. As already mentioned the seven largest democracies will be outlining a cooperative strategy for achieving this at their upcoming meeting in May in Hiroshima. Japan has already started to regulate cryptos and MiCA regulation is all set to start its work in 2012, other members are still trying to develop their frameworks.
The potential of their work
They are working on standards for cryptos, and recommendations on worldwide stablecoins, activities of cryptocurrency assets, and markets are set to get delivered soon. There is uncertainty about the overall tone of the recommendations. The IMF is recently urging countries to abolish all legal tender status for cryptos. They are promoting bigger regulations and working on one interoperable CBDC platform.
Leaders mentioned FASB to work on the rule of travel
G7 leader’s meeting’ global nature means that they can impose rules on crypto’s international movement. All leaders are closely working with the Financial Accounting Standards Board for addressing risks of stability linked with cryptocurrency assets. FASB last year top was urged for advancing the swift development along with the implementation of constant and comprehensive regulation of cryptocurrency asset issuers and service providers to hold cryptocurrency assets such as stablecoins to the same standards as the remaining financial system. The leaders asked for bigger action surrounding the so-called crypto assets travel rule.
Now, the Financial Action Task Force plenary in Paris’ delegates decided for implementing new standards surrounding the Travel Rule. Such rules will enforce the transmission of the beneficiary and originator information for cryptocurrency. Such stringent enforcement standards followed the regulation of virtual assets introduced in 2019. Then, this law suggested a requirement for collecting data regarding the source and the destination of transfers of virtual assets. Recently in an interview with BelnCrypto, Notabene’s chief operating officer Alice Nawfal praises the approach of the EU. She mentioned that they had shown maximum flexibility when they drafted the aspect of compliance with the Travel Rule. According to her they were moving fast and were open.