G7 Discusses Supervision of Crypto-Asset and Climate Change Risks
The G7 published an official statement, also known as the Communiqué, summarizing developments at the May meeting of the finance ministers and central bank governors in Petersberg, Germany. Discussions focused on topics such as the G20 roadmaps for cross-border payments and sustainable finance as well as the digitalization and climate change management initiatives.
The G7 emphasized the importance of work on the G20 Roadmap for enhancing cross-border payments and highlighted the opportunities and implications of Central Bank Digital Currencies (CBDCs) and their potential role in future payment transactions. The G7 encouraged jurisdictions exploring CBDCs to examine the international dimensions of CBDCs, in particular their cross-border use. G7 supported the work by the Financial Stability Board (FSB) to monitor and address financial stability risks arising from all forms of crypto-assets, including stablecoins, and welcomed increasing global cooperation to address regulatory issues associated with the use of crypto-assets, including in cross-border payments. The G7 reaffirmed that no global stablecoin project should begin operation until it adequately addresses relevant legal, regulatory, and oversight requirements through appropriate design and by adhering to applicable standards. The G7 remains committed to high regulatory standards for global stablecoins, following the principle of same activity, same risk, same regulation.
The G7 central banks noted their commitment to enhance international cooperation and coordination on integrating climate risks and aspects into their macroeconomic analysis and modeling toolkit. The G7 leaders agreed to explore and establish an open, cooperative international climate club to support the implementation of the Paris Agreement, consistent with international rules and with participation beyond the G7. The leaders also welcomed the ongoing work by international organizations on stocktaking and mapping of climate change mitigation policies within the G7 as well as globally. G7 emphasized that the resilience of financial markets is key to mobilizing private sector finance to facilitate the whole-of-economy transition along the pathway toward sustainability and net zero. G7 reiterates its commitment to support the implementation of the G20 Sustainable Finance Roadmap and the FSB Roadmap for addressing climate-related financial risks. G7 welcomed the work of other international standard-setting bodies in facilitating knowledge-sharing and promoting awareness-raising measures on money laundering linked to environmental crimes and fostering international co-operation through a multi-stakeholder dialogue. G7 also recognized the urgency to improve the multilateral frameworks for debt restructurings and underscore its commitment to successfully implement the G20 Common Framework for Debt Treatments beyond the Debt Service Suspension Initiative, which is also endorsed by the Paris Club.
Related Link: Press Release
Keywords: International, Banking, CBDC, Cross-Border Payments, Central Bank Digital Currencies, Crypto-Assets, ESG, Climate Change Risk, Transition Risk, Sustainable Finance, ML TF Risk, Debt Restructuring, Stablecoins, G7
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Dr. Denton provides industry leadership in the quantification of sustainability issues, climate risk, trade credit and emerging lending risks. His deep foundations in market and credit risk provide critical perspectives on how climate/sustainability risks can be measured, communicated and used to drive commercial opportunities, policy, strategy, and compliance. He supports corporate clients and financial institutions in leveraging Moody’s tools and capabilities to improve decision-making and compliance capabilities, with particular focus on the energy, agriculture and physical commodities industries.
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