G7 has been warned by a senior official from the Bank of Japan (BOJ) that a common framework for regulating digital currencies needs to be put in place as soon as possible.
The statement comes in response to the continued conflict between Russia and Ukraine, as concerns around cryptocurrencies being used to evade economic sanctions continue to rise.
Kazushige Kamiyama, the head of the Bank of Japan’s payment systems department, told Reuters that using stablecoins makes it very easy to create “an individual global settlement system.” This would in turn make it easier for nation states to avoid current, traditional, and regulated payment systems that rely on the U.S. dollar, euro, and yen for settlement.
US allies, including Japan, had imposed sanctions against Russia for invading Ukraine on February 24, 2022. These sanctions included the removal of many Russian banks from SWIFT, the global payments system.
Kamiyama added that the G7 nations will only be able to effectively coordinate to regulate cryptocurrencies and digital assets if they treat the matter with a high sense of urgency, seeing that the current regulations do not fully take into account their increasing adoption and the rapidly growing number of digital assets in the market.
Governments across the globe have been allocating resources towards developing a regulatory framework for cryptocurrencies and other digital assets for a number of years now.
However, up until this point, regulatory frameworks have been majority regional. A globally accepted regulatory framework will strengthen the impact of financial sanctions imposed on a country by other nations, disabling the sanctioned country financially.
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Source: Cryptocurrency - investing.com
