G20 is Optimistic About the Impact of Cryptocurrency
The July meeting of G20 was majorly all about cryptocurrency. In the meeting held in March this year, the Finance Ministers and Central Bank Governors agreed to come together in July and present a set of specific recommendations on what to do about cryptocurrency.
The finance ministers and central bank governors have decided in the G20 meeting that cryptocurrencies don’t pose a current threat to global financial stability and it’s not really their problem yet. The representatives admitted that cryptocurrency brings benefits while posing new challenges. The main benefits noted by the G20 ministers are not digital currencies per se but are with the blockchain technology itself. The main challenges are in dealing with cryptocurrency’s applications in tax evasion, money laundering, and terrorist financing.
Looking at the reports, it can be safely concluded that nothing has changed for cryptocurrency because of this meeting. Financial Action Task Force (FATF), which handles the tax evasion, money laundering, and terrorist financing side of things, have been handed over the “how/whether to globally regulate cryptocurrency” question.
To clarify how it wants to deal with cryptocurrency, The FATF has a new deadline of October 2018. This might bring some interesting developments. The deadline is also for reviewing a global anti-money laundering (AML) standard on cryptocurrency.
It was reported last month that the FATF is planning to develop binding rules of AML for the world’s cryptocurrency exchanges to step up its scrutiny effort over crypto money laundering.
The G20 says that it will monitor the developments in the crypto space and will study the long-term effects of crypto. It further added,
“While crypto-assets do not at this point pose a global financial stability risk, we remain vigilant. We welcome updates by the FSB and the SSBs and look forward to their future work to monitor the potential risks of crypto-assets, and to assess multilateral responses as needed. We reiterate our March commitments related to the implementation of the FATF standards and we ask the FAFT to clarity in October 2018 how its standards apply to crypto-assets.”
Meanwhile, the global, bankless, volatile, and intermediary-free nature of cryptocurrency means it doesn’t fit into existing FATF guidelines anywhere near as neatly as fiat currency and other asset types.
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