G20 Nations Agree to Work to Formulate Regulations on Cryptocurrencies
At the 2018 G20 summit, that was held on 30 November 2018, and 1 December 2018 in Buenos Aires, leaders of the member states pledged to work on a regulatory framework on cryptocurrencies to combat money laundering and terrorist financing, in conformity with the guidelines laid down by the Financial Action Task Force (FATF).
A Positive or a Negative Move?
Among other matters, such as climate change, global healthcare, the declaration expounds on embracing new forms of technologies which are traditionally not related to banking.
Under Section 25, the declaration stated:
“We look forward to continued progress on achieving resilient non-bank financial intermediation. We will step up efforts to ensure that the potential benefits of technology in the financial sector can be realized while risks are mitigated. We will regulate crypto-assets for anti-money laundering and countering the financing of terrorism in line with FATF standards, and we will consider other responses as needed.”
Interestingly, the initiative, to bring the ‘fugitive economic offenders’ to the task, was spearheaded by Indian Prime Minister Narendra Modi. He presented a nine-point list urging other G20 members to combat these offenders who have committed economic crimes, including that of cryptocurrency-related.
In this year’s previous G20 summit, there were no specific steps taken to combat cryptocurrencies-related crimes or regulations. At the time, the Financial Stability Board (FSB) – the international body that monitors the global financial system, stated that cryptocurrencies “do not pose a serious risk, they do merit scrutiny.”
On Cryptocurrencies and Taxation
The declaration highlighted the very relevant global issue about cryptocurrencies and taxation. Although, the statement did not specify cryptocurrencies, in Section 26, it stated that the countries would continue to work “together to seek a consensus-based solution to address the impacts of the digitalization of the economy on the international tax system with an update in 2019 and a final report by 2020.”
While the declaration is an exciting development, it remains to be seen whether countries implement regulations or laws independently. For instance, India appears to be in a stalemate concerning the stance on the legality of cryptocurrencies. The country’s central bank – the Reserve Bank of India is locked in a legal tussle with crypto bourses over a crippling banking blockchain on the crypto market. The sooner the governments take a decisive stance, the sooner can people understand, which way the dice will fall.
Will the G20 regulatory framework adversely affect crypto markets? Let us know your views in the comments section.