G20 Finance Leaders Acknowledge Cryptocurrencies’ Technological Benefits for the Financial System

Japan’s Ministry of Finance on June 9, 2019, published a joint statement from the various G20 finance ministers and central bank governors requesting the Financial Stability Board (FSB) to keep a close eye on risks surrounding crypto-assets. The two-day meeting in Fukuoka, Japan, took place over the weekend.

Call for Increased Surveillance

Cryptocurrencies have historically had a dubious record when it comes to convincing global political and economic organizations about their enormous untapped potential as the catalysts for a fintech revolution.

International bodies like the International Monetary Fund (IMF) and the Bank for International Settlements (BIS) have often critiqued “magic internet money” saying it is neither a reliable medium of exchange nor an accurate store of value.

However, the latest joint-statement by the world’s top finance stalwarts rings a little more encouraging.

The joint communiqué published by Japan’s Ministry of Finance acknowledges cryptocurrencies’ technological innovation and its potential impact in bettering the “global financial system and the broader economy.” At the same time, the statement stressed the need for the proper regulation of cryptoassets and urged the FSB and other authorities to “monitor risks and consider work on additional multilateral responses as needed.”

The report also states that, at the moment, cryptoassets do not pose any significant threat to global financial stability.

The steady ascent of cryptocurrencies has kept every financial watchdog around the world on their toes with a few of them taking the most extreme of measures.

Digital currencies are often touted as criminal’s favorite to sponsor terrorist activities or for illegal money laundering, and in that regard, policymakers are keeping a keen eye on every development in the space while also taking proactive measures to mitigate consumer and investor risks.

FATF Crypto Regulations

G20 added that they are fully committed to applying the recently amended Financial Action Task Force (FATF) Standards to virtual assets and related providers for anti-money laundering.

FATF’s crypto recommendations found weight in October 2018 when Moscow decided to up the regulatory pressure on local crypto ventures.

On a more recent note, on April 1, 2019, BTCManager reported that Pakistan could introduce its cryptocurrency regulations soon as part of its action plan regarding the FATF.