Global Economies Demand Clear Crypto Regulations

The US Department of the Treasury announced on Monday that finance ministers and central bank officials from G7 countries backed crypto regulations. The attendees discussed the recent developments regarding CBDCs and privately-owned digital currencies.

The US Treasury Secretary Steven Mnuchin hosted an online meeting of officials from Canada, Germany, Italy, France, Japan, the U.K, and the European Commission including finance ministers and central bank governors from the mentioned countries.

“There is strong support across the G7 on the need to regulate digital currencies,” the official statement mentioned. The officials also discussed potential threats of digital assets including involvement in illicit activities.

German finance minister Olaf Scholz remained the most vocal official during the meeting as he criticized the upcoming launch of Facebook’s Diem cryptocurrency in Germany and Europe. He said that Europe cannot allow private cryptocurrencies to operate in the region.

“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,” Scholz added.

Evolving Market

The statement termed cryptocurrencies as an evolving market and backed the need to provide a clear regulatory framework. The officials discussed 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.” G7 supported the need of a joint statement on the future of cryptocurrency regulations. The officials discussed the potential benefits of digital assets to improve financial transactions including cost and time reduction.

German finance minister recently expressed his views on a potential central bank digital currency (CBDC) in an online conference on future payments in Europe and said that the Europeans should work very hard to find a solution for digital payments. Christine Lagarde also expects the launch of a digital euro in the next 2-4 years.