The Bank of Japan has told the G7 to work out how to regulate crypto as soon as possible

According to Reuters, a senior Bank of Japan (BOJ) official has cautioned the G7 countries that the time is ticking on a unified framework to govern cryptocurrencies.

Japan central bank tells G7 to figure out how to regulate crypto—fast

In view of the ongoing turmoil in Ukraine, the BOJ official cautioned G7 governments to step up efforts to reduce the risk of crypto-powered sanction evasion.

They said that appropriate restrictions must be put in place before cryptocurrencies "upend" the global settlement system.

"Creating an individual global settlement system utilizing stablecoins is not difficult," Kazushige Kamiyama, head of the BOJ's payment and settlement system section, told Reuters.

The aim, according to Kamiyama, is to bring present rules up to date with the quickly changing crypto business. He went on to say that the G7 is "collaborating while sharing information on current events."

In fact, in the wake of Russian President Vladimir Putin's invasion of Ukraine, Japan appears hellbent on controlling cryptocurrency.

Hirokazu Matsuno, Japan's Chief Cabinet Secretary, informed the cabinet of fresh proposed revisions to the Foreign Exchange and Foreign Trade Act earlier this week.

The revisions would force crypto exchanges to enforce sanctions in the same way that traditional banks do.

Japan's plans for a digital yen could be hampered by new G7 standards

Any new G7 laws — particularly in the areas of money laundering and privacy — could have ramifications for Japan's plans for its own central bank digital currency (CBDC).

The BOJ is already working on a new digital yen. Because the project is expected to enter the next phase of development in April, any new legislation may need to take into account the impending central bank-sponsored stablecoins.

Any official launch date, however, will almost certainly be determined by the CBDC timetables of other central banks around the world.