The group of seven members came together for a meeting in Japan where they discussed various topics, including crypto regulations and CBDCs (Central Bank Digital Currency). It is now accelerating its efforts for the global implementation of the “travel rule” for crypto assets.
The meeting was held in Niigata, Japan where the G7 committee discussed how they can ensure global financial implications for the CBDCs. Furthermore, the laws to monitor and govern the transfer of crypto assets also came under discussion.
The Summary of the Meeting
In a press release detailing the discussions, the committee showed its support for creating CBDCs with a warning that there needs to be a probe to ensure that they follow the set guidelines.
This means that their basis should be dependent on the rule of law, clarity, data protection, cyber security, and economic governance. Furthermore, the press release also reported the International Monetary Fund’s (IMF) work in developing a “CBDC Handbooks” as a positive step.
It also said that the G7 is working towards getting the first set of deliverables to be published before this year’s annual meetings of the IMF and World Bank Group.
The G7 committee has members from the United Kingdom, France, Italy, Japan, Germany, Canada, and the United States. In addition to these nations, the European Union acts as a “non-enumerated” member.
The Niigata meeting is held just before the yearly G7 summit that will take place this week (May 19 to May 21) in Hiroshima.
Quick Implementation of the Travel Rule
In the latest meeting, the G7 members also discussed the controversial “Travel Rule,” which requires financial institutions to carry out transactions of more than $3,000 to disclose certain information.
This would include the sender’s name, complete address, and account details. According to the press release, the G7 committee made a clear stance regarding the FATF’s (Financial Action Task Force) initiatives.
The committee expressed its support towards ramping up the efforts made by the FATF standards for various digital assets, including cryptocurrencies.
This also includes the “travel rule” and its efforts on emerging risks, such as peer-to-peer transactions and decentralized finance (DeFi) arrangements.
There is still isn’t much clarity regarding whether or not U.S. President Joe Biden will attend since he is dealing with the impending debt ceiling dilemma that is the reason behind the deadlock in Congress.
However, the Financial Times reported that the U.S. wants other countries in the G7 to enhance the overall economic pressure on the new economic superpower “China.” Throughout the summit, the US has emphasized increasing the economic pressure on China.
Interestingly, China wasn’t mentioned in the Niigata meeting’s communique at all. Russia and Ukraine were the two nations mentioned 18 and 17 times respectively.
G7 Aims To Continue Increasing the Regulations on the Crypto Market
The G7 has expressed its desire for a long time to have a tougher check and balance on how the crypto industry operates globally. Therefore, we can expect to see some major developments to come in the latest annual meeting that will be held in Hiroshima.
Leaders from the most powerful democracies in the world will come together and draft a strategy that will give more room for clarity regarding crypto transactions.
Moreover, it would also aim to improve consumer data and investment protection. The committee also plans to address the risks threatening the global financial system at the summit this year.
Out of the G7 members, the European Union has the Crypto-Assets (MiCA) regulation that will come into effect in 2024. Japan also regulates the cryptocurrency market with certain laws and regulations.
Additionally, the UK is also working towards developing its crypto framework. It has a separate category for digital assets on the tax forms that it recently launched and also has the plan to bring in a digital pound.