This weekend, the finance ministers of the world’s largest economies were told that cryptocurrencies “do not pose any risk” to the global financial system. The two-day G20 summit starts today in Argentina but Mark Carney, the Financial Stability Board (FSB) Chairman, made a statement just before the chiefs headed to the summit. The FSB is the body that coordinates the financial regulations for the G20 countries.
“As its work to fix the fault lines that caused the financial crisis draws to a close, the FSB is increasingly pivoting away from the design of new policy initiatives towards dynamic implementation and rigorous evaluation of the effects of the agreed G20 reforms.”
Cryptocurrencies were set to be a hot topic among the Summit, as many different countries have scrambled in the last 9 months to attempt to regulate the digital assets. Carney believes that these assets pose issues around consumer and investor protection and he believes that criminals and terrorists use the digital tokens to shield illicit activity.
Carney also added, “Even at their recent peak, [cryptocurrencies] combined global market value was less than 1% of global GDP. In comparison, just prior to the global financial crisis (in 2008), the notional value of credit default swaps was 100% of global GDP.”
France and Germany have made it a point to call for discussions of cryptocurrency at the summit, as well as Japan. It remains unknown if just two days of meetings can unify all governments involved to come to an agreement on regulations. Many countries have a unified speculation around these digital assets, we will see what they can get done.
Nigel Green, the founder, and CEO of deVere Group says, “nearly all foreign exchange transactions go through banks or currency houses, and this is what needs to happen with cryptocurrencies. When flows run through regulated exchanges, it will be much easier to tackle potential wrongdoing, such as money laundering, and make sure tax is paid.”
As news continues to drip out from the conference, we will continue to monitor and update accordingly.
Featured Image: CNN