The Group of Seven major economies will discuss the tight regulations to control the crypto space in order to protect consumers after the collapse of the major crypto exchange, FTX, according to the statement from the top official on Sunday.
Currently, many countries are forming regulations for crypto by citing the risk associated with it. However, the G7 countries strive to develop global standard regulations, putting it as a main agenda in the meeting of finance ministers and central bankers in mid-May.
The Group of Seven (G7) nations plan to expedite discussions in mid-May regarding potential risks to the world’s financial system. This decision comes amid continued concerns among G7 members regarding the risks posed by cryptocurrency and related industries. The discussions are expected to focus on the need for tighter global regulations in an effort to mitigate these risks and promote financial stability.
This year, the G7 summit is going to be held in Hiroshima under the hosting of Japanese Prime Minister Fumio Kishida.
The official disclosed that the need for a regulatory framework was prompted after the fall of the FTX, which drowned millions of dollars of investment. Also, the domino effect sparked from it caused devastation in the entire crypto space, resulting in a record-breaking fall in cryptocurrency.
Apart from this, ongoing turmoil in the banking sector that wiped out three major banks also spread fud about the crypto’s negative influence on the traditional market. However, no concrete evidence is present to back this debate.
Major financial regulators warned users against crypto time-to-time to create urgency for crypto regulations. In October, the Financial Stability Board (FSB) stated that crypto assets should also be subject to regulations for commercial bank activities. It is planning to propose a regulatory framework for crypto by July.
In September the International Monetary Fund (IMF) said crypto assets are no longer niche products and hence, regulators must catch up.