The international Group of Seven widely referred to as G7 is still concerned about the implosion and bankruptcy filing of the cryptocurrency exchange FTX and is, therefore, pushing for more robust and stricter regulation for the crypto industry.
Markedly, the member nations of this society which includes the United Kingdom, Canada, Italy, Germany, Japan, France, and the United States, plan to hasten ongoing discussions about crypto legislation.
Based on their drafted plans, there should be a convergence of central bank executives and ministers of finance by Mid-May. The meeting is scheduled for a few days before Fumio Kishida, the Prime Minister of Japan, holds the summit for 2023 at Hiroshima.
Noteworthy, it is evident that the collapse of Bahamian-headquartered cryptocurrency exchange FTX and the resignation of the company’s Chief Executive Officer (CEO) Sam Bankman-Fried, sparked negative reactions from many entities. A significant number of investors especially institutional traders have become jittery and some of them resorted to selling off their crypto holdings according to a JPMorgan survey.
These investors have become more aware of the inadequate governance within the crypto industry and some of them no longer trust in the integrity of the sector.
Also, the disaster which happened two weeks ago in the U.S. banking sector may have triggered animosity towards the nascent crypto industry. Crypto-linked financial institutions Silvergate Bank, Silicon Valley Bank, and Signature Bank collapsed within one week due to some regulatory uncertainties.
G7 to Restore Transparency With Crypto Regulation
Presently, the G-7 is trying to restore transparency as well as customer protection through policies that will guide crypto exchanges and other digital asset-related service providers.
Before this time, Kazushige Kamiyama, the head of the payment systems department at the Bank of Japan (BOJ), advised the G7 nations to adopt a common crypto regulation. Although, he made the suggestion at the time when Russia invaded Ukraine.
Japan now has crypto regulations in place and has encouraged global policymakers to implement the regulations on digital assets just as it is enforced on traditional financial assets. Canada and the U.S. also have previously established legislation that they currently apply. However, the G-7 nations are trying to come up with strict crypto regulations of global standards.