Nations forming the Group of 20 (G20) summit in Argentina this week issued Comunicado oficial de la primera reunión de ministros de Hacienda y presidentes de Bancos Centrales del G20, or first communication from the world’s central bankers concerning their work. The two page document is crammed with statements, and on the final page bankers seemed to table cryptocurrency regulations, while acknowledging both their potential for “efficiency and inclusiveness” but also “tax evasion, money laundering and terrorist financing.” Bankers urged the Financial Action Task Force (FATF) to apply their standards to “crypto-assets” in order to “advance global implementation.”
G20 Will Tackle Crypto Regs Mañana
“We acknowledge that technological innovation, including that underlying crypto-assets, has the potential to improve the efficiency and inclusiveness of the financial system and the economy more broadly,” G20 central bankers noted in their publication, Communiqué: Finance Ministers & Central Bank Governors,19-20 March 2018, Buenos Aires, Argentina. “Crypto-assets do, however, raise issues with respect to consumer and investor protection, market integrity, tax evasion, money laundering and terrorist financing. Crypto-assets lack the key attributes of sovereign currencies. At some point they could have financial stability implications.”
The G20 is an international forum for governments and central bankers from Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Mexico, the Republic of Korea, the Russian Federation, Saudi Arabia, South Africa, Turkey, the United Kingdom, the United States, and the European Union, (plus Spain as a permanent guest member). Collectively, they represent two-thirds of the world’s population and over 80% of the globe’s economic output.
“We commit to implement the FATF standards as they apply to crypto-assets,” the online posting continued, “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.”
Crypto Enthusiasts Breathe a Sigh of Relief
The FATF ahead of this week’s meeting issued their own report, FATF Report to G20 Finance Ministers and Central Bank Governors March 2018. The 12 page document discusses standards for “virtual currencies,” noting “Virtual Currency Payment Products and Services (VCPPS)” will continue to be monitored, especially “particular methods of terrorist financing activity that pose an emerging threat, as well as at products and services that may represent an emerging vulnerability.” Later, they describe the current state of crypto as a patchwork of “regulatory framework across different countries” which “can be exploited by criminals, stifle innovation and create uncertainty,” stressing the how “FATF will continue its work on FinTech and virtual currencies, including considering how to promote and ensure a more coherent and consistent approach by countries to mitigating the risks and supporting financial innovation.”
The Paris-based FATF is an intergovernmental organization (also known as Groupe d’action financière) focused mainly on money laundering with a particular emphasis on terrorism financing. Its jurisdiction is among 37 member states, operating a blacklist of uncooperative nations … which can amount to severe financial pressure without formal sanction.
Overall, cryptocurrency enthusiasts took a giant breath of relief. Prior to the meeting, crypto markets were tanking. The run-up to Argentina was largely seen as a black cloud, as many member nations had openly called for tighter crypto restrictions on a global level. But then, seemingly out of nowhere, a letter from the chair of the Financial Stability Board (FSB), Mark Carney, advised the G20 against new rules regarding crypto, suggesting what eventually became evident: there is no consensus among global leaders with regard to regulation. News sent markets into bull mode with bitcoin’s price rising above 9,000 USD as of this writing.