“Strong support” for crypto industry regulation at recent G7 meeting

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Ministers from the seven influential countries called for greater regulatory oversight and laws for cryptocurrencies as the market sees increased adoption from both institutional and retail crowds.

Ministers support calls for crypto regulations

As per a note published by the US Department of Treasury on Tuesday, Secretary Steven T. Mnuchin met with the financial heads and governors of Canada, France, Germany, Italy, Japan, the United Kingdom, the European Commission, and the Eurogroup to discuss cryptocurrencies and the industry’s strong growth in the past months. They were joined by the heads of the IMF, World Bank, and Financial Stability Board.

Cryptocurrencies have seen a resurgence in 2020 amidst a bleak economic outlook and fears of inflation due to the incessant money printing by governments around the world. Investors have, hence, turned to Bitcoin and gold ahead of cash and bonds, spurring the sector’s rise again after the infamous bull run of 2017.

The state heads discussed domestic and international economic responses underway and strategies to achieve a robust recovery throughout the global economy.

But importantly, they discussed policies and responses to the evolving landscape of crypto assets and other digital assets and national authorities’ work to prevent their use for malign purposes and illicit activities.

The group said:

“There is strong support across the G7 on the need to regulate digital currencies.  Ministers and Governors reiterated support for the G7 joint statement on digital payments issued in October.”

G7 officials had earlier stated in a joint statement on digital payments in October, noting the new financial regime could improve access to financial services and cut inefficiencies and costs. However, they added that such products be “appropriately supervised and regulated.”

However, not all’s well in stablecoin land

Despite the support for cryptocurrencies, German Finance Minister Olaf Scholz issued a stern statement about the concerns of Facebook’s upcoming Diem stablecoin (rebranded from Libra) in Germany and Europe.

“A wolf in sheep’s clothing is still a wolf,” he noted, adding “It is clear to me that Germany and Europe cannot and will not accept its entry into the market while the regulatory risks are not adequately addressed.”

Mnuchin had, as per rumors earlier this month, said crypto-regulations regarding private wallet providers were imminent. This meant putting exchanges, and both “hard” and “soft” wallets under the purview of regulators and requiring their users to submit a mandatory KYC check.

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