Cryptocurrency Regulation Recommendations discussed in the G20 Summit

22 March 2018

A deadline has been set for next July, whereby the G20 meeting consisting of various finance ministers has led to the call for proposals on cryptocurrency regulations.

The stance taken by the majority of the economic leaders was one of a unified nature, whereby they are calling for a harmonised regulatory framework to be set in place which will govern cryptocurrencies. Furthermore, it came out clear from the meeting that the standards of the Financial Action Task Force are also to be applied with respect to any such regulations which may be put forward in the foreseeable future.

Whilst the phenomenon of virtual currencies has been hard to ignore in recent times, the discussions are said to have been inspired by calls for more analysis by France, Germany, the United States and Japan. This manifests how countries all over the world are looking to stay on top of this industry which is continuously growing by trying to avoid letting cryptocurrencies negatively impact investors and the world economy.

It was clear from the speeches of various speakers that there is a huge concern of cryptocurrencies being used for illicit activities. Hence, by setting in place universal regulations governing the same, it could lead to a scenario whereby such technology would not be abused for unlawful gain. Nevertheless, from a different perspective, many have argued that such a stance might hinder the innovation behind such technology and that it would lead back to the initial efforts which spearheaded the emergence of decentralised currencies – that of not being regulated by a central authority and of prioritising the privacy of the users.

It is still unclear how these countries will go about the proposed regulations, with some of the officials calling for a global set of regulations that every country would be able to enforce.

One of the member countries, in particular Brazil, was one of those members that already came out against cryptocurrencies being regulated within their jurisdiction. This has led to some uncertainty over whether such proposed regulations may actually be put in practice, given that certain countries may get to choose to disregard them completely.

On the other hand, it would still be considered as a positive step forward by those who are in favour of adding more certainty to the industry by having in place a set of international regulations or guidelines which one would be able to resort to for reference. By having in place a set of regulations on which there is consensus by various countries, some argue that this would work in favour of the investor in the form of an added layer of protection, since one would be able to refer to the same source of information.

During and after the meeting had taken place, individuals around the world have appeared to welcome the news positively, with most cryptocurrencies registering a mini bull run practically across the board.