Amid the ongoing heated debate about the regulatory landscape for crypto across the world, the Group of Seven (G7) may also take up the issue. Given this month’s UST debacle, the leading regulatory authority with representatives from — the United States, Canada, Japan, Germany, France, Italy and the United Kingdom are reportedly going to discuss the state of crypto regulation this week.
The Bank of France Governor, François Villeroy de Galhau told Reuters that “what happened in the recent past is a wake-up call for the urgent need for global regulation”. He added that “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”.
MICA’s Crypto Regulation
Earlier this year, in March Vauld Insights reported on the European Union’s (EU) decision with its Markets in Crypto Assets (MiCA) framework. While deciding against a blanket ban on crypto, the EU also emphasized the need for regulatory action.
The EU declined the Economic and Monetary Affairs Committee’s plea to ban all Proof-of-Work (PoW) generated tokens including bitcoin. Following this, the regulator recommended the addition of crypto-assets mining in the EU taxonomy (a classification system) for sustainable activities by 2025 as an alternative to the ban.
In light of this, the lead Member of the European Parliament (MEP), Stefan Berger noted that “by adopting the MiCA report, the European Parliament has paved the way for an innovation-friendly crypto-regulation that can set standards worldwide”. However, in spite of supporting a pro-crypto regulatory framework, MEPs also conveyed that consumer protection and financial stability were at the top of their priority while drawing up crypto regulations. The MEPs stated that “transparency, disclosure, authorization and supervision of transactions” will play a vital role in ascertaining both consumer protection and economic stability.
Given the state of crypto in 2022, the industry is gaining the attention of global regulators. According to a recent PeckShield Alert report, as of May 1, 2022, DeFi hacks accounted for $1.57 billion in stolen funds, surpassing the $1.55 billion stolen throughout 2021. Meanwhile, NFT discord hack frenzy is also catching up to speed along with the exclusive Terra-Luna fiasco.