The G20, an international forum for the governments and central bank governors from various countries set a deadline for July in the direction of its first crucial and foremost step towards unified regulation of cryptocurrency. Finance ministers and central bankers from around the world discussed new regulations for cryptocurrencies this week on Tuesday at G20 summit in Buenos Aires. The discussions mostly revolved around the implications of cryptocurrencies and the potential applications of its underlying technology along with the discussions on promoting an inclusive global tax system and the challenges and opportunities in the current global context. Argentina Central Bank chair Frederico Sturzenegger said the member nations present agreed that cryptocurrencies needed to be examined, but that more information was needed before any regulations could be proposed.
Though, during the press conference, he noted that the members had a firm deadline in July for recommendations, saying:
“In July we have to offer very concrete, very specific recommendations on, not ‘what do we regulate?’ but ‘what is the data we need?'”
Sources at the summit found amid discord over the approach of regulating cryptocurrency.
Brazil Central Bank president Ilan Goldfajn said cryptocurrencies will not be regulated in his country, according to news service El Cronista. The outlet further reported that Brazil would not necessarily be following the regulations outlined by the G20, on cryptocurrencies or other issues.
Some central bankers and government officials have supported taking a closer look
at the impact cryptocurrencies could have on crime, investors and on the world economy. While finance officials from France and Germany said in a joint letter that cryptocurrencies “could pose substantial risks for investors,” U.S. Treasury Secretary Steven Mnuchin and an anonymous Japanese government official expressed concerns about their use in illegal activities.
On the other side, major regulators given an impression of positivity on cryptocurrency’s impact on the global financial system. Bank of England head Mark Carney, who also chairs the G20’s Financial Stability Board, wrote that “crypto-assets do not pose risks to global financial stability at this time,” citing the relative size of the overall market cap.
Even at their recent apex, cryptocurrencies make up less than 1 percent of the global gross domestic product (GDP), he said, the notional value of credit default swaps was 100 percent and equal to the global GDP in 2008.
In the interim, the pronouncement by G20 out on Tuesday afternoon, and said:
We reaffirm the conclusions of our Leaders on trade at the Hamburg Summit and recognise the need for further dialogue and actions. We are working to strengthen the contribution of trade to our economies. Technology, including digitalisation, is fundamentally reshaping the global economy given its borderless and intangible nature, and its increasing ability to automate cognitive tasks.
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. 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.
We commit to step up our fight against terrorist financing, money laundering and proliferation financing. We call for the full, effective and swift implementation of the FATF standards worldwide.
Amongst the world leaders voicing opinions and debating the aspects of cryptocurrency. “Guidelines are foreseeable, and cryptocurrency is here to stay at any cost because its not possible to stop it. The regulators are trying to regulate something which is already regulated by its own protocol. If you see the whitepaper of Bitcoin, it clearly says that the idea behind its creation is to have a decentralized currency which is above the intervention of governments and borders, hence the only way this industry would grow is with unified global governance support, even if it goes against the completed decentralized ideology of cryptocurrency in the first place. I believe the only worry for any regulator will be to keep a track of where the money is going and to make sure it is not used for any kind of illicit activity. Bitcoin and cryptocurrency transactions are completely traceable to infinity, hence to keep a track of it, We will have to develop a mechanism to track where crypto currency is being converted to fiat currency or is exchanged for any goods or services because sooner or later Bitcoin and other cryptos will start getting used as currencies which have a fundamental idea to be used as exchange for goods or services whereas right now it is just a store of value. Its emerging and that will surely take some more time!” said Sidharth Sogani from Block Next Solutions LLP