The world’s economic leaders have set a July deadline for the first step toward unified regulation of cryptocurrency.
Speaking Tuesday after the G20 meeting of finance ministers in Buenos Aires, Argentina Central Bank chair Frederico Sturzenegger said the member nations present agreed that cryptocurrencies needed to be examined, but that more information was needed before any regulations could be proposed.
However, during the press conference, he noted that the members had a firm deadline in July for recommendations, saying:
“In July we have to offer very concrete, very specific recommendations on, not ‘what do we regulate?’ but ‘what is the data we need?'”
Not every nation is on board with this plan. On Monday, Brazil Central Bank president Ilan Goldfajn said cryptocurrencies will not be regulated in his country, according to news service El Cronista. The outlet further reported that Brazil would not necessarily be following the regulations outlined by the G20, on cryptocurrencies or other issues.
In the meantime, the G20 pledged to apply the standards of the Financial Action Task Force (FATF) – an intergovernmental body formed to fight money laundering and terrorist financing – to cryptocurrency.
In statement released Tuesday afternoon, the G20 said:
“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. We call on international standard-setting bodies (SSBs) to continue their monitoring of crypto-assets and their risks, according to their mandates, and assess multilateral responses as needed.”
The discussions were inspired in part by calls for a closer look at cryptocurrencies by France, Germany, the U.S. and Japan over the last several months.
Central bankers and government officials have advocated taking a closer look at the impact cryptocurrencies could have on crime, investors and on the world economy. While finance officials from France and Germany said in a joint letter that cryptocurrencies “could pose substantial risks for investors,” U.S. Treasury Secretary Steven Mnuchin and an anonymous Japanese government official expressed concerns about their use in illegal activities.
However, where major regulators seem to agree is on cryptocurrency’s impact on the global financial system. Bank of England head Mark Carney, who also chairs the G20’s Financial Stability Board, wrote on Sunday that “crypto-assets do not pose risks to global financial stability at this time,” citing the relative size of the overall market cap.
Cryptocurrencies make up less than 1 percent of the global gross domestic product (GDP), he said, while credit default swaps were equal to the global GDP in 2008.
Some of the officials attending the summit called for a global set of regulations that every country would be able to enforce, but it is unclear how far discussion on possible regulations has gotten.
That being said, a public document released prior to the meeting noted that “the technology behind crypto assets has the potential to promote financial inclusion,” but noted that the impact on financial stability and potential uses in tax evasion and illegal activities needed to be understood first.
A second meeting is expected to take place tomorrow, hosted through the G20 President’s office.
Editor’s note: Some of the statements in this article were translated from Spanish.
G20 image via Shutterstock.