G7 called to accelerate the implementation of the regulation of cryptocurrencies due to Terra’s collapse

What’s new? G7 countries have called to accelerate the “development and implementation of consistent and comprehensive regulation” of cryptocurrencies following the collapse of the Terra (LUNA) ecosystem. The G7 appealed to the Financial Stability Board (FSB), which is responsible for drafting the document, Reuters reports. Individual representatives of the G7 have also spoken about the current situation around stablecoins.

Material by Reuters

G7 members’ opinions. French Central Bank Governor François Villrois de Galleau at a meeting of G7 leaders said:

“What happened in the recent past is a wake-up call for the urgent need for global regulation.”

He added that these issues will be discussed at the further G7 meetings. The group consists of the UK, Germany, Italy, Canada, France, Japan, and the US.

What is the FSB? It is a special body created by the G20 countries in 2009 to monitor the global economy. The FSB analyzes financial markets, liaises between regulators, and sets internationally accepted regulatory standards.

What happened before? South Korean authorities would hold a parliamentary hearing after the collapse of the TerraUSD stablecoin rate. Terraform Labs founder Do Kwon was called to speak to parliament and explain the reasons behind what happened. One of the purposes of the hearing is to take measures to protect investors.

The US Securities and Exchange Commission (SEC) intends to tighten the regulation of stablecoins. Commissioner Hester Peirce reported that the regulator has the power to include in its powers the development of rules for digital currencies and the platforms on which they are traded. She also suggested the use of a “trial-and-error” approach to the issue of the regulation of stablecoins.

In May, Ashley Alder, Chair of the International Organization of Securities Commissions (IOSCO) reported that global market regulators would create a joint body to coordinate cryptocurrency rules in 2023. He called cybersecurity and a lack of transparency in the cryptocurrency sector key risks that regulators were lagging behind on.