G20 Drops Deadline for New Cryto Regulations

Group of 20 finance ministers see no urgency in adopting new cryptocurrency standards in the immediate future, opting instead to maintain “vigilant” monitoring of the blockchain market.

G20 Comments on Crypto

The G20’s hands-off approach to cryptocurrency will continue until at least October, according to an official communique issued following the latest round of ministerial meetings in Buenos Aires, Argentina. In the official statement, G20 members reiterated that cryptocurrencies do not presently “pose a global financial stability risk.”

Cryptocurrency was one of the main topics discussed at the July 21-22 meeting. After an initial push to harmonize global regulations on the matter, the Financial Action Task Force (FATF) will “clarify in October 2018 how its standards apply to crypto-assets.” This suggests that a coordinated plan to regulate the market is still a long ways off.

The communique adds: “Technological innovations, including those underlying crypto-assets, can deliver significant benefits tot he financial system and the broader economy. Crypto-assets do, however, raise issues with respect to consumer and investor protection, market integrity, tax evasion, money laundering and terrorist financing.”

The G20’s position on crypto has softened considerably since March, when officials identified the need for “very concrete, very specific recommendations” on regulating the market. At the time, it appeared that group members were planning to take concrete steps toward regulation.

The Financial Stability Board (FSB), which is headed by Bank of England Governor Mark Carney, holds the view that cryptocurrencies aren’t a financial state risk due to their small size and lack of integration with the broader monetary system.

FSB Assessing Crypto Metrics

As Hacked reported last week, the FSB has presented a plan for monitoring cryptocurrencies market as part of a broader initiative to scope out and rein in material risks before they crystalize.

In a ten-page report, the FSB outlined metrics “that are most likely to highlight such risks,” including market capitalization (size and growth rate), price levels and volatility. In other words, these are the metrics FSB officials will rely on for monitoring crypto-assets and deciding if new regulations are warranted.

Despite the G20’s hands-off approach to crypto, nations around the world are feeling the urgency to carve out clearer guidelines for regulating the space. The U.S. Securities and Exchange Commission (SEC) took a bold step last month by declaring bitcoin and Ethereum to be “sufficiently decentralized” and therefore not subject to federal securities laws.

In South Korea, lawmakers are said to be drafting new regulations to bring domestic cryptocurrency exchanges under established financial market guidelines. Meanwhile, a ban on crypto-dealings in India is being reviewed by a committee appointed by the finance ministry to clarify whether existing regulations are sufficient.

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

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Chief Editor to Hacked.com and Contributor to CCN.com, Sam Bourgi has spent the past nine years focused on economics, markets and cryptocurrencies. His work has been featured in and cited by some of the world's leading newscasts, including Barron's, CBOE and Forbes. Avid crypto watchers and those with a libertarian persuasion can follow him on twitter at @hsbourgi