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G7 Countries Demand Swift Crypto Regulations after Terra Collapse

Finance ministers and central bank leaders of the G7 countries met on Thursday, May 19, in Germany. The recent G7 meeting comes in the backdrop of the global equity market correction and crypto market crash.

Following the recent collapse of the Terra ecosystem, the top financial leaders of the G7 have demanded swift and comprehensive regulations for digital assets. The group of finance ministers and central bankers have asked the Switzerland-based Financial Stability Board (FSB) to look into the matter. As per the documents accessed by Reuters, the G7 noted:

“In light of the recent turmoil in the crypto-asset market, the G7 urges the FSB (Financial Stability Board)…to advance the swift development and implementation of consistent and comprehensive regulation”.

Earlier this week, French central bank head Francois Villeroy, spoke about the recent collapse of the Terra ecosystem. Addressing the emerging market conference in Paris, Villeroy said:

“What happened in the recent past is a wake-up call for the urgent need for global regulation. Europe paved the way with MICA (regulatory framework for crypto-assets), we will probably … discuss these issues among many others at the G7 meeting in Germany this week”.

The FSB has been already working on the regulation, supervision and oversight of global stablecoin. The Terra ecosystem collapse last week has only accelerated the demand for greater regulations.

SEC Demands Greater Regulation for Crypto Exchanges

Earlier this week on Wednesday, May 17, SEC chair Gary Gensler shot yet another warning to crypto exchanges while speaking before the congressional subcommittee.

“The crypto exchanges should come in and register, or, frankly, we’re going to continue to bring, use what Congress has given us, in our enforcement and examination functions,” said Gensler.

The SEC chief’s comments came after Rep. Steve Womack (R-AR) expressed displeasure over SEC’s failure to set clear regulations for cryptocurrencies. Responding to it, Gensler said that the SEC has initiated over 80 enforcement actions on crypto-asset offerings and platforms.

“I think the rules are actually quite clear that if you’re raising money from the public, and the public anticipates a profit based on the efforts of that sponsor, that’s a security,” he noted.

Furthermore, Gensler has also warned that there’s more pain left in the crypto space. “I think a lot of these tokens will fail. I fear that in crypto… there’s going to be a lot of people hurt, and that will undermine some of the confidence in markets and trust in markets writ large,” he added.

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G7 Countries Demand Swift Crypto Regulations after Terra Collapse