At the last G20 summit in March 2018, opinions about legitimacy and the risk of cryptocurrencies were divided. While some countries feared that official measures would bring more legitimacy, others feared that an unregulated crypto market could disrupt the established financial system.
When the session was over, participants promised to enact cryptocurrency laws at their next July meeting. However, the G20 meeting failed to announce comprehensive regulatory guidelines for digital currencies.
Cryptocurrencies like Bitcoin are not a problem
In the run-up to the summit, the Financial Stability Board (FSB), the regulator of the G20, concluded that cryptocurrencies such as Bitcoin and Ethereum do not pose a significant risk to the global economy, but rather merit further observation
In short, while crypto markets are robust but not well integrated into the traditional financial system, it is unlikely that a crypto crash would affect the entire financial system. As Jeffrey Kleintop, Chief Global Strategist at Charles Schwab, recently said to Time: “In order for a potentially destructive bubble to form, cryptocurrencies will have to be much more widely adopted and a much larger portion of the budgetary wealth or assets will be used by leveraged investors such as banks or some hedge funds.”
However, the G20 expressed several concerns about the proliferation of crypto assets:
- Consumer and investor protection
- Market integrity
- Tax evasion
- Money laundering
- Terrorist financing
Money Laundering Initiative is already running
The FSB Guidelines already contain measures to monitor money laundering and terrorist financing, and the G20 bases its initiatives on its expertise and the instructions of the Financial Action Task Force (FATF), as reported on criptozoom. The G20 meets again in October and they have asked the FATF to clarify their digital assets standards.
Money laundering and terrorist financing became an issue this month when a US federal charge indicted 12 Russian agents for money laundering via Bitcoin to finance their hack on government institutions. The Bitcoin price is determined by many factors, but concerns about over-regulation have affected crypto enthusiasts throughout the year.