By Prarthana Mitra
The finance ministers and heads of the central banks of the G20 countries have called for a strict and continued monitoring of cryptocurrencies by July 2018 at the conclusion of the G20 summit in Argentina on Tuesday.
The summit, which took place from March 19-20, witnessed representatives from across the globe addressing pertinent issues and challenges facing the global economy, and the need to foster innovative economic reforms, foreign policies and sustainable growth to combat financial crises.
Following several discussions about blockchain and cryptocurrency, representatives seemed to be in agreement with the fact that assets such as the Bitcoin raised “issues with consumer and investor protections, market integrity, money laundering and terrorist financing.” There was a lot of deliberation on how the blockchain technology stands to threaten the current economic system, although it did garner support from many policymakers as well.
The summit was proof that most of the world’s economic leaders were in favour of cryptocurrencies, heralding an inevitable era of digital finance. However, G-20 concluded its session with an appeal for a new directive, one aimed at crypto-assets and blockchain standards.
Backed by Argentina’s Central Bank chief Frederico Sturzenegger, who noted cryptocurrencies need to be examined, a press release by the communiqué of the First Meeting of Finance Ministers and Presidents of Central Banks of the G20 stated these assets have the “potential to improve the efficiency and inclusiveness of the financial system and the economy more broadly.”
The press release goes on to detail that these assets also raise important issues as they lack “key attributes” of sovereign currencies. The group also called upon “international standard-setting bodies (SSBs) to continue their monitoring of crypto-assets,” including assessing the risks of such assets. “(We) look forward to the FATF review of those standards, and call on the FATF to advance global implementation,” added the group.
However, not all countries have managed to reach an agreement on the regulation of crypto-assets. According to El Cronista, a local news outlet, Brazil’s Central Bank president Ilan Goldfajn has revealed cryptocurrencies won’t be regulated in his country. The demand for an international regulation was met with some amount of scepticism from global traders, who were nonetheless relieved that the G20 have chosen not to crackdown on cryptocurrencies, chiefly the Bitcoin.
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Prior to the event, the Financial Stability Board (FSB), an international body that monitors the global financial system to promote stability for G20 nations, sent a letter to its members regarding the issue of such currencies.
“The FSB’s initial assessment is that crypto-assets do not pose risks to global financial stability at this time,” outlines chairman Mark Carney in the letter. Carney added this assessment is due to the small market value of such currencies ” relative to the financial system,” and this assessment could change if the currencies divulged into the core markets and systemic infrastructure of the worlds financial systems.
According to reports, Bitcoin dipped briefly below $9000 but the digital currency was spiking during the course of the G-20, standing at $8,937 by the end of the conference, with a total market cap of $152,109 billion.