G7 Calls for Enhanced Regulation and Faster Adoption of Travel Rule in Crypto Industry

In the recently concluded G7 summit held in Japan, world leaders once again turned their attention toward cryptocurrencies.

Effective Monitoring, Regulation and Oversight of Cryptocurrency

In a communique document, the G7 emphasized the importance of effective monitoring, regulation, and oversight to address the financial stability and integrity risks associated with cryptocurrency. The document also highlighted the need to support responsible innovation in the crypto space while mitigating potential risks.

The document also noted that the G7 “eagerly anticipates” the finalization of high-level recommendations by the Financial Stability Board (FSB) by July 2023.

Acceleration of the Travel Rule

The G7 also recommended that the implementation of the “travel rule” for crypto is acelerated. This rule mandates that crypto companies screen, record, and share information of both the sender and recipient for transactions exceeding $1,000 or a specified threshold set by FATF member states.

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In particular the document noted “In light of the growing threats from illicit activities, in particular by state actors, including the theft of crypto-assets for proliferation
financing, ransomware attacks, terrorist financing, and sanctions evasion, we support initiatives by the Financial Action Task Force (FATF) on accelerating global implementation of the FATF Standards on virtual assets, including the “travel rule”, and its work on emerging risks, including from DeFi arrangements and peer-to-peer transactions.”