Central bankers and finance ministers representing 19 of the world's most influential national economies met today in Buenos Aries, Argentina, for the annual G20 summit to promote international financial stability.
The topic of cryptocurrency regulation has found its way into several G20 discussions that have been taking place since Mauricio Macri assumed the annually rotating G20 presidency on November 30, 2017.
The trend began in early February when several high-ranking government officials suggested that cryptocurrency-related dialogs should take place at the summit.
According to official G20 documentation "crypto assets" will be discussed alongside the G20 initiative to seek "a strong and sustainable financial system."
Bank of Japan governor Haruhiko Kuroda told reporters that active debate by officials is already underway, and that attendees are trying to balance consumer protection with embracing innovation. "There may be areas where regulations could be beefed up," said Kuroda. "But we also need to make sure we don't stifle new technology."
Prior to the meetings scheduled for today and tomorrow, vice president of Germany's Bundesbank, Claudia Buch, stated that "the role of crypto tokens in money laundering and criminal activity must also be closely examined," but also that she doesn't "see a threat for financial stability at the moment as the speculations are generally not financed with loans and the relevant markets are rather small."
The FSB and Mark Carney
Yesterday, Reuters reported that a recent letter from the Financial Stability Board's (FSB) chairman, Mark Carney, to the G20 finance ministers and central bankers echoed Buch's sentiments: "The FSB initial assessment is that crypto-assets do not pose risks to global financial stability at this time."
Per Reuters, Carney's letter also apparently calls for more international coordination to "plug data gaps in monitoring the rapidly evolving but still tiny sector worth less than 1 percent of global GDP at its peak."
Generally speaking, the FSB's commentary is a reputable indication of possible G20 action. Created in 2009, the FSB helps to coordinate international monetary directives and brings together senior policy makers from finance ministries, central banks, and supervisory regulatory authorities.
This is not the first time that Carney, who is also the governor of the Bank of England, has cautioned against over-regulating cryptocurrencies. In a speech entitled "The Future of Money" given to the Scottish Economics Conference at The University of Edinburgh earlier this month, Carney stated:
"Some of the underlying technologies are exciting. Whatever the merits of cryptocurrencies as money, authorities should be careful not to stifle innovations which could in the future improve financial stability; support more innovative, efficient and reliable payment services as well as have wider applications."
Carney went on to warn, "On the downside, at present, crypto-assets raise a host of issues around consumer and investor protection, market integrity, money laundering, terrorism financing, tax evasion, and the circumvention of capital controls and international sanctions."
If Carney's words are any indication of what the G20 might be discussing in Argentina today and tomorrow, perhaps the conclusion from his Edinburgh speech is indicative of where regulatory cooperation on cryptocurrency is headed:
"Bringing crypto-assets onto a level regulatory playing field could also catalyse private innovation to create a more resilient effective payments system. With these foundations in place, the scene is set for better payments, a better economy and a better Friday night out."
ETHNews will be following the G20 summit in Argentina closely.