Developing Strategies for a Cross-Border Approach to the Crypto Market

Authorities in the US and the UK perceive this summit as a key component for developing cross-border strategies seeking to get a grip on the crypto market.

At a Jun 29th meeting, Her Majesty’s Treasury and the US Treasury Department formed an alliance to support digital assets by promoting safe innovation.

Stablecoins are cryptocurrencies that attempt to maintain a fixed price.

The joint statement issued states that top domestic watchdogs such as the SEC, the CFTC, staff from the Bank of England, and the Financial Conduct Authority(FCA) have all participated in such a meeting. The panel has laid a foundation for dialogues as such in the future, according to this document.

Since its creation, cryptocurrency has been designed to overcome third-party restrictions on borderless transactions. Since the market crashed and the news was filled with stories of crypto assets' fiascos, regulators are eager to develop cross-border efforts targeting the industry.

The ongoing "key role of stablecoins and crypto-asset trading and lending platforms" in the digital asset ecosystems, as seen in the recent drama surrounding Terra and Celsius, has prompted regulators from all over the world to express their concerns.

“UK and US participants also considered future opportunities for further discussion on broader crypto-asset regulatory initiatives and considerations as their respective policy and regulatory agendas progress.”

The G7 & G20 meetings have also been widely reported on in the media, as indicated by the statement. Both parties agreed that “robust cross-border regulatory cooperation” will be a key theme of future meetings, with the aim of establishing a clear regulatory framework for stablecoins and crypto exchanges.

As a form of digital currency, CBDCs are designed to be used for transactions.

In addition, the UK and US authorities also updated their approaches to CBDCs, exchanging views on their plans for policy research and technology exploration. The BIS survey indicated that nine out of ten central banks are exploring how to launch their own CBDCs, so it was not a surprise when the Bank of International Settlements (BIS) reported that the majority of its members were engaged in this activity.

Cecilia Skingsley, First Deputy Governor of Sweden's central bank, believes that the rise in the use of CBDCs in a fiat-based monetary system is an evolution of central banks' roles rather than a revolution.

She said that the biggest challenge in cross-border CBDC payments is interoperability, since digital currencies are designed and implemented by governments worldwide. As a result, cooperative communications between nations before launching such currencies have become essential for ensuring future success.