G20 Summit Rejects Calls to Regulate Cryptocurrencies

Cryptocurrencies, Exchanges, Law and Regulation, News, Opinion

Finance Ministers and Central Bank Governors from the G20 group of nations met in Buenos Aries, Argentina, 19 -20 March 2018. G20 represents 85% of global economic output and 75% of international trade with their remit being to achieve global financial stability.

The agenda, published in advance of the meeting, referred to crypto assets about financial stability, tax evasion, and financing illegal activities. Some elements of the crypto community welcome additional legislation as they feel it is holding back wider adoption of crypto technology across the globe. Others think that the decentralized structure of blockchain shouldn’t be regulated by the G20 or any other world superpower.

The price of Bitcoin has fallen steadily in recent weeks, and markets were worried that tighter control of cryptocurrencies would add to the downward pressure. It’s probably inevitable, at some point, that legislation will be introduced globally to reduce tax evasion and money laundering, but at present, the whole crypto market represents less than 1% of global GDP. As cryptocurrency trade grows in the coming years, it’s likely to come under ever closer scrutiny by the G20.

Tax evasion and money laundering existed before cryptocurrencies, and they will continue at some level no matter how much legislation is introduced.

Early reports from Reuters indicate the G20 Finance Ministers will be looking to review existing legislation rather than introducing new controls targeted explicitly at crypto assets. Some G20 members were calling for additional regulation, but the Financial Stability Board (FSB) has quashed them for now.

News of the decision from Argentina saw Bitcoin move up from $7,400 to $8,300 with some altcoins seeing even more significant percentage gains. Some of the G20 member states like China and the USA have already taken steps to protect potential investors from the risks of investing in start-up businesses in the blockchain sector. China has blocked all worldwide websites from promoting ICOs in their country.  The U.S. SEC considers most ICOs to be the issue of securities, so most ICOs don’t risk accepting participants from the USA.

G20 will not find it easy to compel all members to take a similar stance since some countries have a much more relaxed approach towards ICOs and other aspects of cryptocurrencies.

Financial analyst, smartphone app designer, technical writer, and crypto enthusiast. Blockchain verified graduate of MOOC 9, DFIN-511: Introduction to Digital Currencies, run by the University of Nicosia.

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