G7 leaders discuss cryptocurrency in their report

Finance Ministers and Central Bank Governors from the G 7 met last week to discuss global economic conditions including cryptocurrencies.

The chairmanship was joined by head of the International Monetary Fund, World Bank Group, Organisation for Economic Cooperation and Development, and Financial Stability Board, some of which have been anti-crypto in their stance.

The report states that the G 7 is working together to monitor and address financial stability risks arising from all forms of cryptocurrencies. It cites the recent market downturn in the criptocurrency markets as a rationale to

There is no reference to the 20% decline in the Dow Jones as a correlation to the decline of the criptocurrency market. A drawdown incryptocurrencies means that more regulation is required in a swift manner.

Traditional markets are supposedly efficient and sufficiently regulated. While there is a lot of regulation needed within the young industry, it is important to consider and accept the nuances of the protocols.

Traditional rules and regulations have been designed for the physical world, but may not apply to the complex nature of DeFi, GameFi, and other digital financial assets. The question of whether this regulation will be thorough and supportive of innovation is raised by the fact that the development of criptocurrency regulation must be completed in a swift and rapid manner. The report does not indicate that stable coin regulation must be encouraging.

It states that digital innovation in payments is a key driver of economic progress and development, particularly through faster, cheaper, more transparent and more inclusive cross-border payment services. The next section of the report does not focus on the markets of criptocurrencies at large. It assesses the feasibility and implementation of Central Bank Digital Currencies, which it believes must be grounded in transparency. It highlights that CBDCs can be the solution to cross-border payments and innovation, even though they are not currently cryptocurrencies.

There are many possible solutions including Bitcoin's Lightning Network, Ethereum Layer 2 solutions and many other Layer 1 blockchains that can handle, process and settle international payments in a matter of seconds. These projects are public, open-source, and decentralized.

They are not subject to the same laws and jurisdictions as CBDCs. The G 7 believes that the control of the financial system must be within their remit. With global inflation over 6% and GDP dropping month on month, some will question whether it is time to change or move towards decentralization.