G7 summit to address regulation of digital assets
The richest countries in the world are preparing to strongly regulate digital currencies
The cryptocurrency sector has recently given us many examples that its regulation by governments is highly desirable. After all, this is a serious matter and is not an area in which states can indefinitely implement the "wild west" and act according to the temporary legal status that is in force in a given jurisdiction. Exactly this approach is currently followed by the G7, i.e. a group of countries with the largest economies in the world. Regulations related to the cryptocurrency market are to be the subject of their debate during the next meeting.
G7 summit will address regulation of digital asset sector in May meeting
In May, the next annual G7 summit will take place, i.e. a meeting of the largest developed economies in the world. This time the event will be held in Hiroshima, Japan. As reported by the Kyoto website on March 25, one of the key issues that the finance ministers of the G7 countries intend to discuss is the issue of organizing the regulation of the digital asset sector.
Representatives of the governments of Japan, the United States, Great Britain, Canada, France, Germany and the European Union intend to strive to develop a joint strategy of actions that are to affect the transparency and security of the cryptocurrency market, and in particular to improve the consumer protection system.
At this point, it is worth noting that most G7 member states are already working intensively on regulating the digital currency sector within their jurisdictions. For example, Japan is developing a legal framework for this asset class, the European Union intends to implement MiCa in 2024, i.e. a pan-European regulation on the cryptocurrency market. In turn, the UK is creating a special framework for digital finance.
According to Canadian law, cryptocurrencies are currently treated as securities. The United States applies current regulations in relation to the cryptocurrency sector, however, market regulations in the United States will definitely benefit companies operating in this country. This is because without a proper legal framework defining the scope of activities of supervisory authorities, we constantly face situations such as those where the SEC claims the right to control all entities in the industry. As a consequence, the SEC, without any specific legal basis, determines what is a security and what is not, sending more and more lawsuits and penalties for the current activities of companies in the digital currency industry.
At the same time, similar plans regarding the standardization of legal regulations in the area of cryptocurrencies have such bodies as the Financial Stability Board (FSB), the International Monetary Fund (IMF), and the Bank for International Settlements (BIS).
It is expected in the coming months that dedicated recommendations will be published regarding the regulation and introduction of a system of supervision over the stablecoin market. It is worth noting that in February the IMF presented a preliminary plan for countries to start removing the possibility of applying for legal tender status for this asset class, as is currently the case in El Salvador.