G20 Countries Seek Recommendations for Cryptocurrency Regulations by July 2018

In the recently held G20 summit in Buenos Aires, Argentina, financial policymakers from all the G20 countries has finally initiated the first step in the direction of global cryptocurrency regulations. On Tuesday, while speaking during a meeting of G20 finance ministers, Argentina Central Bank chair Frederico Sturzenegger said that all the leaders of the G20 have agreed upon to have a watchful eye on digital currencies.

However, he noted that in order to do that the members need more data and so they have sought for proposals on crypto regulations keeping a deadline of July 2018. Sturzenegger said: “In July we have to offer very concrete, very specific recommendations on, not 'what do we regulate?' but 'what is the data we need?”

In the recent past, the extreme volatility shown by cryptocurrencies have increasingly caused fears among different regulatory bodies of its speculative nature and that the money generated with crypto trading might be used for illicit activities like money laundering, tax evasion, terror financing, etc.

All the finance ministers and central bankers have thus decided to monitors “crypto assets” but have not yet taken any specific decision. The G20 leaders, in the official communique, said: “We call on international standard-setting bodies (SSBs) to continue their monitoring of crypto-assets and their risks, according to their mandates, and assess multilateral responses as needed.”

The communique also mentions that the G20 will to apply the standards of the Financial Action Task Force (FATF), which is an intergovernmental body formed to fight terror funding and money laundering, to digital currencies.

The communique notes: “We commit to implement the FATF standards as they apply to crypto-assets, look forward to the FATF review of those standards, and call on the FATF to advance global implementation.”

The discussion of the crypto reached G20 after several regulatory bodies from countries like Japan, France, Germany and the U.S asked for a closer look at digital currencies, over the past few months.

In the communique, the G20 leaders have however acknowledged the “technological innovation” and the emergence of blockchain technology over the past few years. The praised the blockchain technology by saying that it holds the potential to “improve the efficiency and inclusiveness of the financial system and the economy more broadly.”

Just before the G20 meeting, Mark Carney, The Financial Stability Board (FSB) chair and governor of Bank of England said that there seems no immediate need to regulate cryptocurrencies as of now. He said that cryptocurrencies still contribute only 1% of the global GDP and hence they don’t pose enough risks for the global financial system. However, he did mention that a watch should be kept on its growing acceptance.