G7 nations pursuing crypto regulations
Chaired by US Treasury Secretary Steve Mnuchin, the participants also affirmed their support for the recommendations issued in a G7 joint statement on crypto and digital payments back in October. At the time, the G7 mandated that no stablecoin project should be greenlit unless the relevant regulatory provisions were satisfied.
“A wolf in sheep’s clothing is still a wolf. 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. We must do everything possible to make sure the currency monopoly remains in the hands of states.” – German Finance Minister Olaf Scholz
As part of the joint statement, G7 finance leaders also pledged their commitment to working together to analyze the risks inherent in digital payment systems.
War against private stablecoins
Indeed, private stablecoin projects appear to be of major concern to mainstream financial establishments. Back in April, the FSB sounded calls for a coordinated approach to stablecoin regulations across the G20 bloc. The FSB argued that the absence of such a streamlined approach would allow for the emergence of regulatory arbitrage zones that criminal elements could exploit.
As previously reported, Christine Lagarde, President of the European Central Bank (ECB) recently warned that private stablecoins posed greater threats than Bitcoin. The ECB is currently studying modalities for the creation of a digital euro. In 2021, the UK will take over the Presidency of the G7. Already, authorities in the country say stablecoins and central bank digital currency (CBDC) regulations are the main thrust of its fintech agenda post-Brexit.
Meanwhile, in the US, a bill was recently brought before Congress that would see stablecoins fall under banking regulations. The news caused quite a stir within the crypto space with many proponents criticizing the merits of the proposed legislation.