Japan to Call for Crypto Rules at the G20 SummitMarch 14, 2018
Japanese representatives will push for the adoption of global rules on cryptocurrencies at the upcoming G20 meeting in Argentina. Next week, the summit will gather finance ministers and central bankers in Buenos Aires. Other countries also want to put crypto matters on the table, with signals coming from key members of the European Union.
Also read: Excessive Crypto Regulation Not Optimal, EU Banking Authority Says
Stringent Regulations Won’t Be Good
Japan, a country with a proactive fintech policy, is going to urge its G20 counterparts to look into cryptocurrencies and agree on some common regulations. Japanese authorities were among the first to adopt a regulatory framework with a mechanism to oversee trading on registered cryptocurrency exchanges. Their new initiative aims at implementing international guidelines for the quickly developing crypto industry.
According to unnamed Japanese officials, quoted by Reuters, Tokyo will urge G20 members to invest more efforts in preventing the use of cryptocurrencies for illicit activities, like money laundering. Other media reports suggest that one of the sources is Japan’s Chief Cabinet Secretary Yoshihide Suga. He has shared his expectations of active Japanese involvement in the G20 discussions on cryptocurrencies and their impact on the global economy.
Differences in each country’s approach, however, are likely to limit the chances of reaching agreement on specific global rules in a joint communique, the official said. Another source confirmed that discussions will focus on anti-money laundering measures and consumer protection, and not so much on how cryptocurrencies could affect the banking system.
The general feeling among G20 members is that applying too stringent regulations won’t be good.
Finance ministers and central bank governors from the Group of 20 will meet in the Argentinean capital on March 19-20. Other nations also plan to put forward ideas for cryptocurrency regulation. In February, high-ranking French and German officials issued a letter urging their colleagues in G20 to discuss the implications of cryptocurrencies, like bitcoin. They stressed on the need for a transnational regulatory approach and announced intentions to jointly propose regulations.
The Trick: Regulate, but Don’t Stifle
The G20 countries intend to discuss issues related to cybersecurity, the fintech sector and cryptocurrencies, Russian Deputy Minister of Finance Sergey Storchak confirmed in the beginning of March. Digitalization has been included in the agenda on ministerial level for the first time. It has been discussed previously only by experts in the Financial Stability Council, Storchak said. In his words, very few of the G20 members regard cryptocurrencies the same way they view fiat money. The Russian official predicted that the summit would most likely confirm that position.
What Japan is actually worried about is that some nations have looser regulations, when it comes to cryptocurrencies and their possible use for illicit purposes. Last month, Japanese authorities carried out checks on several exchanges after the theft of over $500 million from Coincheck. They revealed almost 700 cases of possible money laundering. In Argentina, the international Financial Action Task Force (FATF) is expected to present a report exploring ways to prevent the use of cryptocurrencies to launder illicit funds.
According to one of the Japanese officials quoted by Reuters, “the trick will be to apply regulations to protect consumers and prevent illicit activity, without stifling innovation in the fast-growing cryptocurrency and fintech sectors”. The G20 countries account for more than 80% of the world’s gross product and trade. Next week’s meeting will demonstrate if they are ready for a measured approach towards cryptocurrency regulation.
Do you expect common rules for cryptocurrencies from the G20 summit? Share your thoughts in the comments section below.
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