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Finance ministers from the Group of Seven (G-7) large developed economies are set to call for faster global crypto regulations in the wake of the collapse of the terraUSD stablecoin last week, according to Reuters.
"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," the ministers wrote in a draft communique seen by Reuters.
The FSB, an international body based in Basel that was responsible for generating many of the post-2008 financial norms, had previously promised a report on the regulation, supervision and oversight of global stablecoins for October of this year. The FSB's leader, Klaas Knot, has already volunteered to write a crypto rulebook that could cover financial stability and investor protection issues.
The turbulence seen in crypto markets last week, in which the Terra asset supposedly worth $1 sank to as low as 7 cents, and Tether's USDT also lost its peg, has only heightened calls for extra regulation.
In a speech given Monday in Paris, French central bank Governor François Villeroy de Galhau cited recent market turmoil as evidence that stablecoins are “misnamed” and “possibly very unstable.” Crypto assets needed to be supervised and interoperable across jurisdictions in order to avoid disrupting the international financial system, he said.
The European Union’s financial services commissioner, Mairead McGuinness, in the course of finalizing European Union crypto laws known as MiCA, has also called for a global agreement on crypto to protect investors and limit the environmental impact of bitcoin-style proof of work technology.
UPDATE (May 19, 2022, 16:48 UTC): Adds additional background and context.