Economic and financial leaders from all over the world are gearing up for what will be another critical and influential G20 summit, starting on 15 March 2018 in Buenos Aires, Argentina, where cryptocurrency is also expected to feature on the agenda.
This year the agenda plays host to over 50 meetings, inviting ministers, foreign ministry emissaries, central bank governors and world leaders. With the increasing volume in the cryptocurrency market and the distortive amount of mainstream news that has been published about blockchain technology, leaders will likely set aside time to discuss its economic implications.
Cryptocurrency is on the Agenda
Finance ministers and central bank governors from France and Germany have called upon the Argentine finance minister, who this year holds the presidency for the summit, calling into question the financial implications of cryptocurrencies. The German and French minister seek for a joint statement through an international report, looking at the future of blockchain and potential impacts on financial stability, working towards a trans-boundary action to regulate it.
This could mean a number of things for blockchain technology, although outright negative outcomes are improbable. As a new asset class, blockchain-based cryptocurrencies have been notable for their volatility and associated risks of investment. Aspects of financial and economic crime will also be cause for concern.
The ministers had this to say, according to media:
“We believe there may be new opportunities arising from the tokens and the technologies behind them… However, tokens could pose substantial risks for investors and can be vulnerable to financial crime without appropriate measures. In the longer run, potential risks in the field of financial stability may emerge as well.”
Japan is also urging members of the summit to take more stringent precautions with an effort to prevent cryptocurrencies from being used for money laundering purposes. While G20 summit officials think a widespread cryptocurrency is not likely, the Financial Action Task Force (FATF), a 37-member group set up initially by the G7 industry heavyweights to tackle illicit finance will continue to monitor the situation.
Japanese policymakers understand that there is a broad spectrum of opinions held by the members of the summit, with some countries having a more relaxed view on the subject, fearing this could lead to loopholes, financing terrorism and money laundering.
Applying regulations on the cryptocurrency space, along with its already transparent nature will be a solid strategy for the members of G20, whether it is short-term regulations to protect consumers or a long-term plan for global adoption. The general feeling among the members of the summit is that imposing strict regulations will not be a good move.
The G20 is made up of 19 countries and the European Union, with permanent guests Spain attending and Argentina’s special guests this year being Chile and the Netherlands.