G7 Calls for Crypto Regulations after Terra Collapse
G7 members are urging regulators to act ahead of next month's gathering of the body before the crypto industry continues to assess the damage done in last week's market crash.
In the wake of turbulence last week in crypto markets, in which Terra's supposedly $1 asset dropped as low as 7 cents, the need for additional regulation has only increased.
There's no doubt that regulators around the world have been paying attention to Terra, as US Treasury Secretary Janet Yellen cited Terra's collapse last week as a possible example of how stablecoins could pose a risk to the financial system - though she later clarified that such a risk is not present currently.
In a draft communique shown, the ministers wrote “In light of the recent turmoil in the crypto-asset market, the G7 urges the FSB (Financial Stability Board)…to advance the swift development and implementation of consistent and comprehensive regulation.”
Basel's Financial Stability Board, an international financial policy organization that generated many of the global financial standards post-2008, had previously committed to releasing a report on regulation, oversight, and supervision of global stablecoins by October.
François Villeroy de Galhau, the governor of the French central bank, said that recent market turmoil demonstrates stablecoins are "misnamed" and "possibly very unstable." He called for the supervision of crypto assets and interoperability across jurisdictions in order to avoid a disruption of the international financial system.
In the midst of finalizing EU crypto laws known as MiCA, the European Union's financial services commissioner Mairead McGuinness has also called for a global agreement on cryptocurrency as a way to protect investors and limit climate change.
CBW - External Analyst