G7 pushes accelerating global implementation of ‘travel rule’ for crypto assets

Group of 7 members met in Japan, where they discussed CBDCs and crypto regulation, with an eye toward quickly implementing the “Travel Rule” for crypto assets.

The G7 committee recently met in Niigata, Japan to discuss, among other topics, the global financial implications for central bank digital currencies (CBDCs) and the laws governing the transfer of cryptocurrency assets.

In a communique summarizing the discussions, the committee reiterated its support for developing CBDCs with the caveat that further investigation was needed to ensure they are grounded in “transparency, the rule of law, sound economic governance, cyber security and data protection.”

The communique described the International Monetary Fund’s (IMF) work in developing a “CBDC Handbook” as “welcome” and said the G7 committee was looking forward to the first set of deliverables to be published by the 2023 World Bank Group and IMF Annual Meetings, slated to take place in Marrakesh, Morocco on Oct. 15.

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Committee members also discussed the controversial “Travel Rule” requiring any financial institution processing cryptocurrency transactions greater than $3,000 to disclose the sender’s name, address and account information. Per the communique, the committee’s stance was made clear:

“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.”

The G7 committee comprises representatives from Canada, France, Germany, Italy, Japan, the United Kingdom and the United States, with the European Union serving as a “non-enumerated” member.

The Niigata meeting precedes the annual G7 summit, scheduled to take place in Hiroshima from May 19 to 21.

While it’s still unclear if U.S. President Joe Biden will attend, as the impending debt ceiling impasse is causing a deadlock in Congress, the Financial Times reports that “the U.S. wants its rich nation partners to increase the economic pressure on China” during the summit.

Interestingly, while Ukraine was mentioned 17 times in the Niigata meeting’s communique (Russia received 18 mentions), China wasn’t mentioned at all.