Crypto asset regulation will be a topic of talk among the Group of Seven, according to French central bank head Francois Villeroy de Galhau, Reuters reported Tuesday (May 17).
The finance chiefs are set to meet this week in Germany. Speaking at an emerging markets conference, Villeroy said the recent crypto turbulence in the markets proved that there was a need for regulation.
“What happened in the recent past is a wake-up call for the urgent need for global regulation,” Villeroy said.
In addition, he said Europe’s Markets in Crypto-Assets (MiCA) regulatory framework had been something they could build off of. He added that they would discuss that, along with other issues, at the G-7 meeting.
Calls for crypto regulation are not new. For example, U.S. Securities and Exchange Commission (SEC) Chair Gary Gensler said crypto assets are “highly speculative” and investors need more protections before they lose trust in the markets.
Gensler said those not buying crypto don’t get the disclosures that come with asset purchases of other kinds, including things like whether trading platforms are trading against them, or if they own the assets stored in the digital wallets.
According to him, there exists a “basic bargain” in which the public can make choices about risks, though there’s supposed to be disclosure and honesty in all of it. He said the SEC would be something like a “cop on the beat” in terms of enforcing rules on crypto, such as anti-fraud measures, anti-manipulation and making sure a real order book exists.
Gensler added that crypto markets aren’t really decentralized, due to the fact that a lot of the activity comes from a few trading platforms. He said those platforms have to work with the SEC.
The talk of regulation is in the wake of the collapse of the UST stablecoin, which lost its one-to-one peg with the dollar. Crypto as a whole, including many big coins and exchanges, were facing disastrous results because of that.