G20 Don’t View Crypto as Threat to World Financial Stability
The latest G20 summit, held on Sunday in Buenos Aires, came to the conclusion that cryptocurrency is not a threat to global financial stability.
Cryptocurrency is considered a drop in the bucket still, with the collective market capitalization of the entire sector worth less than 1% of the world GDP, even during December 2017’s peak.
The G20 is a summit attended by leaders of the top 20 economies, responsible for 85% of the world’s gross domestic product (GDP). This includes economies of Argentina, Australia, China, US, UK, South Africa, and the European Union, to name a few.
A report written up about the meeting stated that crypto wasn’t a concern, but could also “deliver significant benefits to the financial system and the broader economy”.
Some of the countries are aware of this, with those most invested in the blockchain sector for the next five years all being G20 members, according to an IDC report.
Despite realizing the potential cryptocurrency has for the world, the G20 did also acknowledge the problems the nascent technology still has.
At the top of their list was concerns such as consumer and investment protection, tax evasion, money laundering, and terrorist financing. The report concluded that while cryptocurrency doesn’t pose a threat, vigilance must be maintained as the sector continues to grow.
The G20 finished its talking point on cryptocurrency by welcoming updates from the Financial Stability Board (FSB) and SSB on risk monitoring of crypto-assets, as well as giving the Financial Action Task Force (FATF) a reminder about its previous intentions.
It made commitments to implement FATF protocol for handling crypto-assets back in March but has asked for clarification. The US, France, and Japan are all in support of a global policy to regulate this asset class due to crypto easily being set across the border, but more information is still needed.
Since cryptocurrencies share little similar characteristics with traditional fiat currency, the G20 has assigned the task force a deadline of October 2018 to clarify its stance on cryptocurrency.