The intercontinental political forum consisting of the seven biggest economies in the world (better known as the G7) is reportedly willing to implement rigid rules on the cryptocurrency industry after the numerous negative events which took place recently.
The final version of the framework should be ready by July this year, while the nations will discuss key elements next month in Washington.
Protecting Investors in Case of Another Crash
As revealed by a Japanese media outlet, the authorities of Canada, France, Germany, Italy, Japan, the UK, and the USA intend to join forces and design pertinent global rules for the crypto sector. Consumer protection and increasing business transparency will be the main focus of the upcoming legislation.
The G7 nations believe the industry needs hasty actions, blaming the poor governance and the lack of strict supervision as the primary reasons behind the FTX failure last November. Recall that the former crypto giant went from being worth over $30 billion to filing for bankruptcy in what many called a fraudulent scheme. Scam or not, the demise caused multi-billion losses for investors.
The officials have also expressed their concerns regarding the recent banking collapse in the US. Silicon Valley Bank (SVB) and Signature Bank, who served multiple crypto clients, revealed liquidity difficulties and were shut down by regulators.
The former even filed for bankruptcy protection, granting itself some time to restructure its operations and find a way amid the chaos. As CryptoPotato reported, First Citizens BancShares Inc agreed to acquire SVB, purchasing $72 billion of its assets at a discount of $16.5 billion.
Keeping those events in mind, the G7 will discuss the specifics of the future legislation at a meeting of finance ministers and central bankers in mid-May. The authorities will also comment on such policies at another assembly held in Washington the following month, attended by officials of the top 20 largest economies.
The complete version of the bill is expected to see the light of day in July this year.
Pointing the Finger After the Terra Crash, too
The informal bloc also raised its voice on crypto a few days after the infamous demise of Terraform’s native token – LUNA – and its algorithmic stablecoin – UST.
François Villeroy de Galhau – Governor of the Bank of France – argued that the fiasco last May and the consecutive market crash should serve as a “wake-up” call for implementing appropriate rules in the industry.
Mark Branson – President of Germany’s financial market regulator BaFin – and Narendra Modi – India’s Prime Minister – have later proposed that global regulators should collaborate and enforce such rules on the digital asset industry that could ensure maximum investor protection.
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