The world’s economic leaders gathered in Buenos Aires, Argentina for the G20 summit, and sought for proposals of cryptocurrency regulations to come by July 2018 according to the G20 communique. The document backs the words of Frederico Sturzenegger, Argentina’s Central Bank chief, who noted cryptocurrencies need to be examined.
Having seen the document, you may note that cryptocurrencies are out of the picture. The world’s economic leaders seemingly prefer to call cryptocurrencies “crypto-assets,” implying they see cryptos as assets and not currencies.
The G20 communique goes on to read: “We acknowledge that technological innovation, including that underlying cryptoassets, has the potential to improve the efficiency and inclusiveness of the financial system and the economy more broadly. Crypto-assets do, however, raise issues with respect to consumer and investor protection, market integrity, tax evasion, money laundering, and terrorist financing. Cryptoassets lack the key attributes of sovereign currencies. At some point they could have financial stability implications. We have commited 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.”
The G20 communique notably acknowledges the “technological innovation” underlying cryptocurrencies, which has the potential to “improve the efficiency and inclusiveness of the financial system and the economy more broadly.”
It reads that cryptocurrencies raise issues when it comes to consumer and investor protection, tax evasion, market integrity, money laundering, and terrorism financing, echoing concerns regulators throughout the world have in the past expressed.
Not all countries are on board with this approach, however. According to local news outlet El Cronista, Brazil’s Central Bank president Ilan Goldfajn has revealed cryptocurrencies won’t be regulated in his country.
At the end of the communique, it becomes clear that cryptocurrency regulations are coming by July 2018. It reads: “We ask the FSB [Financial Stability Board], in consultation with other SSBs, including CPMI and IOSCO, and FATF to report in July 2018 on their work on crypto-assets.”
The conclusion the world’s economic leaders seemingly arrived to has been expressed by FSB chief and Bank of England governor Mark Carney, who in a letter sent to G20 finance ministers argued cryptocurrencies ”do not pose risks to global financial stability at this time.”
UK’s first fintech strategy: a new taskforce to look at cryptocurrencies
The UK government is set to launch its first-ever fintech strategy, which will aim to make it easier for firms in the sector to comply with regulations and to partner with banks.
Reports earlier this week indicated that Chancellor Philip Hammond is planning a raft of changes to the government’s approach to fintech, including a new taskforce to look at cryptocurrencies.
The strategy, which is set to be announced at the government’s second International Fintech Conference on Thursday, will pilot a scheme called ‘robo-regulation’ that will build software to ensure fintech start-ups can automatically follow regulations.
The strategy will also include three fintech regional envoys to “ensure the benefits of fintech are felt across the UK” and a set of industry standards which will enable fintech firms to partner with existing banks more easily.
In order to support the growth of small fintech firms, industry and government will work together to create ‘shared platforms’ to help remove the barriers they face, the announcement said.
And a new programme, developed by the government’s fintech delivery panel, will be created to help fintech firms to take advantage of the UK’s diverse workforce. “From the Square Mile in London to Scotland’s Silicon Glen, the UK leads the world in harnessing the power of fintech as we create an economy fit for the future,” said Hammond. “I am committed to helping the sector grow and flourish, and our ambitious sector strategy sets out how we will ensure the UK remains at the cutting edge of the digital revolution.
“We are determined to make Britain the best place to start and grow a digital business while giving consumers more choice when it comes to managing their money,” said Matt Hancock, digital and culture secretary. “This new nationwide fintech programme will help startups right across the country flourish in the future and spread the benefits of this pioneering technology.”
The UK fintech sector contributes £6.6bn annually to the UK economy, and employs over 60,000 people across 1,600 companies, according to the Treasury. In the first three quarters of this year the sector received a record £2.1bn investment.