G20 Agrees to “Monitor” Crypto-Assets

Many of the leading economies see a need for regulation of the crypto-world.

by Marin Marinov
21 March • 2 min
In Regulation

Financial authorities from the G20 Group of the world’s biggest economies agreed to “monitor” crypto-assets, but stopped short of any specific actions, an official statement published on Tuesday stated. Finance ministers and central bank governors discussed the global financial system at a meeting in Buenos Aires on March 19-20.              

Some G20 countries, however, saw a need for regulation of the crypto-world, a Japan Finance Ministry official revealed: “Many G20 members didn’t take crypto-assets too positively and said some form of regulation was necessary,” the unnamed official told Reuters after the summit.

FATF standards

The leading world economies urged international standard-setting bodies to monitor crypto-assets and the risks associated with them and to recommend multilateral responses when needed. Finance ministers and central bank governors called for a global implementation of the FATF standards.

FATF - the Financial Action Task Force - is an inter-governmental body for fighting financial crimes, comprising 37 members, including Russia and China. It sets up standards for combating money laundering and terrorism financing.

one big yellow coin with letter B in front of black background

 “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,” financial authorities from G20 said in a communique.

This is a sign of some form of incoming regulation although the FATF recommendations and its anti-money laundering (AML) and counter-terrorism financing (CTF) standards are not obligatory.

Regulation or not

The unclear words in the final G20 statement can be viewed in light of the stance of the Financial Stability Board (FSB) on the crypto-world. The head of the body that coordinates the G20 financial regulation resisted attempts for crypto-regulation.

The FSB’s initial assessment is that crypto-assets do not pose risks to global financial stability at this time,” FSB Chairman Mark Carney wrote in an open letter to G20 finance ministers and central bank governors on March 13.

In a similar letter before the Buenos Aires Summit, Germany’s and France’s financial authorities called for an international report on the cryptocurrency risks and joint G20 actions: “Tokens could pose substantial risks for investors and can be vulnerable to financial crime without appropriate measures. In the longer run, potential risks in the field of financial stability may emerge as well,” the heads of French and German finance ministries and central banks said in an open letter in February.

mountains in blue color and big capital letters in front of hills
Argentina`s Presidency of G20, official logo/Image`s source: g20.org

A draft law for crypto-asset regulation was submitted to Russian State Duma on March 20, according to an official press release. The legislation is in line with President Vladimir Putin’s call for implementation of crypto-rules and introduces anti-money and counter-terrorism measures.

Assets not currencies

G20 members officially referred to cryptocurrencies as an asset not currency. It is not a legally biding definition, but outlines a potential capital gains tax for crypto-trading activities.

“Crypto-assets lack the key attributes of sovereign currencies,” G20 members concluded after the Buenos Aires Summit.

Note: Cover photo`s source: g20.org