German Chancellor Angela Merkel and UK Prime Minester Boris Johnson at the Carbis Bay. Source: G7
The G7 summit in Cornwall has concluded without tackling issues directly related to cryptoassets or central bank digital currencies (CBDCs) – although the crypto community will be looking closely into what agreements on “tax cooperation” and climate pledges could mean for traders and miners alike.
The summit – the first in-person meeting of world leaders since the start of the coronavirus pandemic – wrapped up over the weekend in St. Ives, and saw leaders from all seven G7 take part, alongside the political leaders of guest nations South Korea, South Africa, India and Australia.
In the summit’s official communiqué, the states pledged to create “a fairer global tax system that reverses the race to the bottom,” adding:
“We will collaborate to ensure future frontiers of the global economy and society, from cyberspace to outer space, increase the prosperity and wellbeing of all people while upholding our values as open societies.”
The leaders agreed to target tax avoidance – a strategy that has seen the likes of American President Joe Biden’s administration propose reciprocal data exchange systems to catch crypto tax evaders using overseas exchanges in an effort to avoid paying taxes on their token-based earnings.
And although there was no direct mention of crypto in the communiqué’s wording, the wider issue of tax avoidance appears high on the political agenda as the time to pay for printing new money in trillions nears. The document was short on specifics, however, and there was a hint that the leaders were happy to delegate the matter of how this should be done to their finance chiefs, who will meet with other G20 officials next month.
The leaders wrote:
“We need a tax system that is fair across the world. We […] look forward to reaching an agreement at the July meeting of G20 Finance Ministers and Central Bank Governors. With this, we have taken a significant step towards creating a fairer tax system fit for the 21st century and reversing a 40-year race to the bottom. Our collaboration will create a stronger level playing field, and it will help raise more tax revenue to support investment and it will crack down on tax avoidance.”
Miners will also have noted ongoing climate control pledges – which have already affected miners in China and elsewhere this year.
“At the heart of our agenda for economic growth and recovery is a green and digital transformation that will increase productivity, […] cut greenhouse gas emissions, improve our resilience and protect people and the planet as we aim for net zero by 2050,” the leaders said.
However, without major players like China at the table, many will feel that talk of carbon emissions policies are insubstantial – and that the real decisions will be taken at the 26th UN Climate Change Conference (COP26), which will take place in November this year.
Regardless, the leaders claimed they want to accelerate the international transition away from coal and stressed that international investments in unabated coal "must stop now."
"We commit now to an end to new direct government support for unabated international thermal coal power generation by the end of 2021, including through Official Development Assistance, export finance, investment, and financial and trade promotion support," they said, reaffirming their existing commitment to eliminating inefficient fossil fuel subsidies by 2025, and calling on all countries to join them.