The G7 held a meeting in Japan to discuss the role of central bank digital currencies (CBDC) and crypto regulation in the global economy. In particular, officials supported the controversial initiative to globally implement “travel rules” for digital assets.

G7 Officials Insist on Disclosure of Crypto User Data

Finance ministers and central bank governors of Canada, France, Germany, Italy, Japan, the United Kingdom, and the United States discussed issues related to the regulation of cryptocurrencies. As a result of the meeting, the G7 committee published a brief communiqué. Specifically, participants voiced unanimous support for the Financial Action Task Force (FATF) initiative to combat money laundering with regard to virtual assets. 

Officials paid special attention to the “travel rule” for digital assets, a regulatory practice developed by the U.S. Financial Crimes Enforcement Network (FinCEN). Under its framework, financial institutions that process crypto transactions over $3,000 must disclose the sender, the address, and the account information. Thus, the G7 committee insists on accelerating the global implementation of “travel rules” for digital assets, citing high risks to users associated with DeFi mechanisms.

The G7 members also supported the development of central bank digital currencies (CBDC), noting the need for more research to ensure transparency, legality, sound economic management, cybersecurity, and data protection in this area. 

The Bank for International Settlements (BIS) recently released Project Polaris, a handbook exploring the risks of offline payments with CBDCs.

The meeting is a preliminary event before the annual G7 Summit, which is scheduled for May 19-21 in Hiroshima. The meeting focused heavily on the economic consequences of the military conflict between Ukraine and Russia. However, the officials never mentioned China, which leads analysts to believe that the initiatives of one of the largest economies in the world won’t be considered in the regulation and global implementation of cryptocurrencies.

Cryptocurrencies remain illegal in China, but the country’s government continues to develop blockchain developments. For example, the National Blockchain Technology Innovation Center (NBTIC) was recently opened in Beijing to train half a million specialists in distributed ledger technology (DLT).

Author: Nataly Antonenko
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