Comprehensive regulations required to prevent illicit activities as a response to cryptocurrency’s evolving landscape, G7 countries discuss
The 12th G7 meeting related to the economic responses to the pandemic, held recently, has concluded that the digital asset sector faces an ongoing need for regulation. With the emerging importance of crypto assets amid the pandemic, numerous countries, including many G7 members are pushing for comprehensive regulations aimed at preventing cryptocurrency’s use in illicit activities.
According to a public statement by the United States Department of Treasury, Treasury Secretary Steven T. Mnuchin hosted a discussion with Finance Ministers and Central Bank Governors from Canada, France, Germany, Italy, Japan, the United Kingdom, the European Commission and the Eurogroup. The heads of the IMF, World Bank and Financial Stability Board also joined the discussion that was aimed at designing a global economic response to the pandemic.
In addition to discussing various issues related to the COVID-19 global pandemic and its resulting economic concerns, the group also discussed “responses to the evolving landscape of crypto assets and other digital assets and national authorities’ work to prevent their use for malign purposes and illicit activities”, the statement released yesterday stated.
“There is strong support across the G7 on the need to regulate digital currencies. Ministers and Governors reiterated support for the G7 joint statement on digital payments issued in October”, it added.
Regulators across the world have stepped up crypto engagement in the past few months. The US Department of Justice has been taking a special interest in cryptocurrencies and its related sectors. One of the biggest headlines this year included the DoJ collaborating with the Commodity Futures Trading Commission to go after crypto-native derivatives exchange Bitmex for serving customers in the US without registering as a derivatives exchange.
Mnuchin tweeted about the meeting earlier yesterday. “Productive #G7 call this morning. We discussed the effective actions in response to COVID19, strategies to achieve a robust recovery, and cryptocurrencies”, he stated.
Following the meeting, German finance minister, Olaf Scholz expressed concern over Facebook’s Libra-turned-Diem asset, claiming that it is nothing but a wolf in sheep’s clothing. “It is clear to me that Germany and Europe cannot and will not accept its entry into the market while the regulatory risks are not adequately addressed”, he explained.
The increased mainstream spotlight over cryptocurrency in the last few weeks has a lot to do with Bitcoin’s surge in value. It is being predicted that Mnuchin will soon announce dropping an impactful crypto-related ruling in the next few weeks, that will essentially forbid users from using personal crypto wallets outside of regulated exchanges.
Written by Harshini Nag