It is important to understand not only what is happening domestically, but also to strive to keep up to date on the international scene.
G20 members want to talk global cryptocurrency policy and regulation. Although several of the G20 member states have tried to deal with cryptocurrency regulation (with varying levels of success) at the local level, the G20 recognizes that cryptocurrency regulation is a global issue. Accordingly, the G20 is now taking baby steps toward formulating a global strategy for cryptocurrencies. The G20 has set a firm July deadline for recommendations from its members on what data is needed to approach a framework of regulation for cryptocurrency on a global basis.
MEMBERS OF THE G20 AND GLOBAL FINANCIAL STABILITY
The G20 is an international forum for the governments and central bank governors from Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Mexico, the Republic of Korea, the Russian Federation, Saudi Arabia, South Africa, Turkey, the United Kingdom, the United States, and the European Union, (plus Spain as a permanent guest member).
Since the creation of the G20, the recurring themes covered by G20 summit members have related in priority to global economic growth, international trade and financial market regulation.
G20 TAKING BABY STEPS TOWARD POSSIBLE REGULATION
This decision to address the possibility of cryptocurrency regulation was not without its detractors. Several G20 members resisted efforts to discuss regulating cryptocurrencies at the latest G20 conference. IIan Goldfain, Brazil’s Central Bank President, chaffed at the idea of global regulation of cryptocurrencies. He stated that cryptocurrencies would not be regulated in his country [Brazil], and that Brazil would not necessarily be following the G20 recommendations [regarding cryptocurrency].
Some G20 members pushed for more immediate action regarding regulation. For example, France and Germany pushed for immediate action on cryptocurrencies and looked to start formulization of regulations.
Ultimately, the G20 decided that the issue of cryptocurrencies had to be addressed, albeit not as quickly as hoped for by some members. The G20 membership “acknowledges that technological innovation, including that underlying crypto-assets, has the potential to improve the efficiency and inclusiveness of the financial system and the economy more broadly.” Therefore, the G20 decided upon the slower, more cautious course of gathering information before addressing the issue.
The G20 has framed the request for recommendations from its members (preceding the July deadline) as an attempt to gather enough tangible data and information to make the July meeting a productive discussion about the global regulation of cryptocurrencies.
ATTEMPT TO PROTECTION
Although the G20 is taking baby steps toward the idea of regulation, there is some initial agreement regarding regulation. There appears to be widespread support for the application of the standards of the G20’s Financial Action Task Force (hereinafter the “FATF”)-a task force formed to fight money laundering and terrorist financing. These standards would be applied in each of the G20 member states.
The G20’s decision to take things slow was a positive for many cryptocurrencies. However, change (and possible regulation) is on the horizon, even though it is happening with baby steps.