Terra Crisis: G-7 Nations Call for Urgent Crypto Regulation
G-7 nations’ finance ministers have urged the group’s Financial Stability Board (FSB) to hasten up the process of formulating and implementing comprehensive crypto regulations following the recent collapse of the TerraUSD (UST) algorithmic stablecoin and the LUNA token, according to a Reuters report on May 19, 2022.
G-7 to Hasten Crypto Regulation
As investors from across the world who pumped in their hard-earned money into the now-defunct Terra project wait anxiously to see whether CEO Do Kwon and his team can create a magic wand that’ll resurrect UST and LUNA, leaders of the Group of Seven (G-7) nations are now set to fastrack crypto regulations.
Per sources close to the matter, during a meeting in Koenigswinter, Germany on May 19, 2022, G7 finance ministers urged the Financial Stability Board (FSB) to accelerate their crypto regulation plans.
“In light of the recent turmoil in the crypto-asset, the G-7 urges the FSB to advance the swift development and implementation of consistent and comprehensive regulation,” declared the G-7 central bankers and finance ministers.
For those who are unaware, the G7 is an inter-governmental political forum made up of seven of the world’s largest economies including Canada, France, Germany, Italy, Japan, the United Kingdom, and the United States, with the European Union also among the group as a ‘non-enumerated member.’
The G7 provides global leadership and influences global trends and tackles pervasive issues around the world.
At the time of writing, it’s still unclear what the G-7 crypto regulatory draft would entail, though some members of the group, including Germany, France, and Japan have exhibited a crypto-friendly stance in recent years.
Is There Still Hope for Terra Investors?
While there have been hundreds, if not thousands of dead projects in the crypto and decentralized finance (DeFi) ecosystems in the past decade, never before has the industry witnessed an established algorithmic stablecoin going from a market cap all-time-high of nearly $18 billion to almost zero in under one month.
The sudden collapse of Terra with no warning signs whatsoever, is indeed a huge disaster for the entire cryptoverse, as it has succeeded in wiping away hundreds of billions of dollars from the crypto markets, with retail investors and projects such as Hashed, a South Korea-based early-stage venture fund that invested heavily in the Terra ecosystem, taking the largest hits.
The Terra fiasco has attracted further scrutiny and criticisms of the blockchain space from authorities in various jurisdictions, with the U.S. Treasury Secretary Janet Yellen, who had previously called for crypto regulations similar to traditional financial systems, using the latest event as an opportunity to further drive her point home.
As reported by crypto.news on May 18, 2022, South Korea’s Financial Services Commission (FSC) submitted a fresh proposal containing stricter guidelines for crypto exchanges and digital asset service providers in the region. The Comparative Analysis of the Virtual Property Industry Act aims to foster consumer protection while curbing illicit activities in the industry.
Amidst the ongoing turmoil, there seems to be a glimmer of hope for Terra investors, as a majority of the project’s team members have greenlighted the revival plan proposed by Terraform Labs CEO, Do Kwon.
