The move comes after the collapse of the FTX exchange in November 2022, as well as the recent banking crisis.
A group of the world’s advanced economies (G7) including Canada, France, Germany, Italy, Japan, the United Kingdom, the United States, and the European Union working On tighter regulation of the crypto industry. According to people familiar with the matter, during the next G7 summit to be held in Hiroshima, Japan in May 2023, nations will come up with a strategy aimed at increasing crypto transparency and enhancing consumer protections, as well as addressing potential risks. global financial system.
the trick is collapse The return of the FTX exchange in November 2022, as well as the recent banking crisis. Crypto industry’s lack of governance has led to bankruptcy, according to G7 collapse Silicon Valley Bank that dealt with technology startups and Signature Bank that targeted crypto customers.
Some of the G7 countries already have proper crypto regulations. For example, in Japan, crypto assets are considered assets under the Payment Services Act (PSA). It is mandatory for crypto exchanges to register and comply with the regulations prescribed in the Anti Money Laundering/Combating the Financing of Terrorism (AML/CFT) law. When it comes to taxation, since 2017, earnings on cryptocurrencies are classified as “miscellaneous income” and buyers must be compensated accordingly. In June 2022, the country banned foreign stable coins, leaving them pegged only against the Japanese yen or other legal tender.
Meanwhile, the European Union is preparing to vote on the new EU Markets in Crypto-Asset Regulation (MiCA) in April. The MiCA will establish proper guidance on crypto regulation, bringing crypto-assets, crypto-asset issuers and crypto-asset service providers (CASPs) under a single regulatory framework for the first time. Once implemented, the MICA will apply to anyone providing crypto asset services or issuing crypto assets operating in the European Union.
Global efforts to establish crypto regulatory framework
Back in October 2022, the Financial Stability Board (FSB) published a set of recommendations on the international regulation of crypto-asset activities. The document covers the main issues and challenges in developing a comprehensive and coherent regulatory approach that covers all types of crypto-related transactions that potentially pose a risk to financial stability. Furthermore, it described possible policy initiatives at the judicial and international levels.
The International Monetary Fund (IMF) is also making efforts to increase crypto regulation. The organization has also considered key elements for each country in order to develop comprehensive and coordinated guidance following the rapid spread of crypto. IMF directors have generally agreed that crypto assets should not be given the status of official currency or legal tender. Furthermore, he believes that strict sanctions are not the best option, but targeted sanctions may take place depending on domestic policy objectives. In the future, the Fund will work together to support regulatory work under the leadership and guidance of standard-setting bodies.
Daria is a crypto enthusiast who strongly believes in the future of blockchain. Being a hospitality professional, she is interested in finding ways in which blockchain can transform various industries and bring our lives to a different level.
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