G7 finance chiefs likely to discuss crypto regulation

Governor of the Bank of France said the depegging of TerraUSD (UST) was a “wake-up call”

Row from flags of members of G7 group                                 
The depegging of TerraUSD (UST) has pushed crypto regulation up the G7 agenda – Photo: Alamy
                                

The Group of Seven (G7) an inter-governmental political forum is likely to discuss the regulation of crypto assets this week in Germany.

François Villeroy de Galhau, governor of the Bank of France, the country’s central bank, told Reuters that G7 finance chiefs are planning to talk about cryptos and regulation.

The G7 consists of Canada, France, Germany, Italy, Japan, the UK and the US.

UST depegging was a ‘wake-up call’

Villeroy de Galhau said the recent depegging of the stablecoin TerraUSD (UST) was a “wake-up call for the urgent need for global regulation” – and added that stablecoins are “somewhat misnamed”.

Speaking at an Emerging Market Forum in Paris on 16 May, the French central bank governor added: “Crypto assets could disrupt the international financial system if they are not regulated, overseen and interoperable in a consistent and appropriate manner across jurisdictions.”

He went on to say that MiCA, the European regulatory framework for crypto assets, was the right approach. “MiCA on the European side paves the right way,” said Villeroy de Galhau.

The collapse of UST could hasten US crypto regulation

The governor’s comments come after Jeremy Allaire, CEO of Circle, the pioneering peer-to-peer payments technology company behind Circle Pay, warned the collapse and depegging of UST could lead to the acceleration of US crypto regulation.

The US-born Allaire, who founded Circle in 2013, said: “When you have a major blow up, it’s certainly going to accelerate the need for Congress to act and establish some perimeters around who and what is involved in operating a dollar stablecoin in the USA.”

Allaire said he felt there were several “very viable legislative proposals” that the US federal government has discussed and could be used to govern the crypto industry.

The depegging incident, added Allaire, had provided a death blow to retail crypto investors and the industry, stepping up the need for regulation.

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