Firm July deadline for crypto regulation
Frederico Sturzenegger, chairman of the Argentinian Central Bank said that a decision was made that cryptocurrencies do need to be looked in to. However, he said more time is needed to examine the facts and, as such, the world leaders agreed on a ‘firm’ July deadline for the new proposals.
He said: “In July we have to offer very concrete, very specific recommendations on, not ‘what do we regulate?’ but ‘what is the data we need?'”
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Governments divided over cryptos
Regulation of cryptocurrencies is a complex issue mainly due to the anonymous and decentralized nature of most coins. Additionally, most governments are divided over cryptos. On one hand, they don’t want to miss out on taxes owed while allowing criminals to run wild. On the other, they do not wish to stand in the way of technological progress and innovation.
Indeed, not everyone was in agreement during this recent G20 meeting. Some have since rejected the July deadline, ‘firm’ as it is. Brazil’s Central Bank president, IIan Goldfajn, says there will be no crypto regulations in his country.
So, it looks like Brazil is one country that won’t be observing the July deadline. In fact, Goldfajn went on to suggest that that Brazil may not toe the G20 line on other issues too. This is according to El Cronista.
Specifically, the report said: “Regarding cryptocurrencies, Goldfajn says that cryptocurrencies will not be regulated, although he warned of their volatility.”
Please note, the above quotes have been translated from Spanish.
G20 crypto-asset statement
In a statement issued on 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.”
Cryptos still small potatoes
The point was also made that, although cryptos should be examined and regulated, they are still small potatoes, in terms of market cap – so to speak.
Mark Carney, head of the Bank of England, on Sunday wrote: “Crypto-assets do not pose risks to global financial stability at this time.” He cited the comparatively small market cap as the reason for the his claim. Carney also chairs the G20’s Financial Stability Board.
He has a point. Cryptocurrencies account for less than 1% of the GDP. Credit default swaps, on the other hand, were equal to the global GDP in 2008. And we all know how that turned out…