A group of finance ministers from the world’s seven largest advanced economies (Canada, France, Germany, Italy, Japan, Great Britain, and the United States; the G7) released a statement saying that Cryptocurrencies must meet the same standards as the rest of the global financial system.
The joint statement calls for stricter anti-money laundering and reserve disclosure rules. The advice to tighten regulation of the digital asset market was attributed by regulators to the TerraUSD (UST) Stabelcoin crash that occurred last week:
“The G7 remains committed to high standards of global Stablcoin regulation, following the principle of ‘same activity, same risk, same regulation”.same regulation
The statement confirmed a report that the Financial Stability Board (FSB) has been asked to speed up work on regulating Stablocoins amid the market shock. The message calls for an early implementation of the Financial Action Task Force (FATF) Crypto Travel Rule (international Cryptocurrency transaction rules).
This is a controversial anti-money laundering (AML) regulation currently being adopted in European Union legislation, requiring stricter disclosure and reporting to regulators. The requirement primarily applies to reserve assets backing Steblecoins.
The G7 countries met last week to discuss Cryptocurrency regulation in light of recent developments around TerraUSD (UST) Stablocoin, military conflict in eastern Europe, and the requirement to comply with U.S. and EU sanctions. Before the meeting, Francois Villeroy de Galhau, head of the French central bank, said that recent events gave the G7 a clear and alarming signal about the urgent need for global regulation.