In a recent meeting in Japan, finance ministers from some of the world’s seven most influential economies, also known as the Group of Seven or G-7, discussed their commitment to regulating crypto-assets and exploring central bank digital currencies (CBDCs). According to a press release, the G-7 called for regulation, monitoring, and oversight of crypto, while still supporting innovation. They also looked forward to the Financial Stability Board’s (FSB) finalization of its high-level recommendations by July 2023.
The FSB, an international advisory body created by the G20, laid out its recommendations for crypto regulation in October 2022. These recommendations showed that the FSB is concerned about custodial wallet providers and exchanges, as well as the liability surrounding the loss of private keys. Furthermore, they recommended granting governments the necessary powers to oversee crypto and promoting coordination among authorities to enforce crypto rules.
Doubling down on their support for these recommendations, the G-7 has committed to implementing effective regulatory and supervisory frameworks for crypto-asset activities, markets, and stablecoin arrangements. Consequently, these frameworks align with the FSB’s recommendations and standards established by standard-setting bodies (SSBs).
In addition to focusing on crypto regulations, the G-7 acknowledged that CBDCs could play a substantial role in a reliable global payment system. They emphasized the need for continued policy deliberation on digital money to harness its benefits, such as payment efficiency and financial inclusion, while also addressing potential risks to the stability, resilience, and integrity of the monetary and financial system.
As of now, 11 countries have launched a CBDC, and all G7 economies have moved into the development stage of a CBDC, according to the Atlantic Council. With 114 countries representing over 95 percent of global gross domestic product (GDP) now exploring CBDCs, a significant increase from only 35 countries considering it in May 2020 has been observed.
The G-7, which includes Canada, France, Germany, Italy, Japan, the UK, and the US, has been meeting regularly since the mid-1980s. Their commitment to implementing effective regulatory and supervisory frameworks for crypto-assets, markets, and stablecoin arrangements, as well as exploring the future of CBDCs, demonstrates the increasing importance and impact of digital currencies on the global economy. However, striking the right balance between fostering innovation and mitigating potential risks remains the central challenge for authorities as they navigate the rapidly evolving crypto landscape.
Source: Cryptonews
