Financial policymakers from the world’s top 20 economies agreed to keep a watchful eye on cryptocurrencies on Tuesday and opened the door to regulating the booming industry at a later stage.
Wild swings in the price of Bitcoin, the best known of a myriad of digital currencies issued by private companies, and fears they may be used for evading taxes, launder money, finance terrorism or just scam small investors have raised calls for concerted actions by global regulators.
Finance ministers and central bankers from the world’s 20 largest economies meeting in Buenos Aires asked regulators to monitor these “crypto assets” but stopped to stop short of any specific action, according to a Reuters report.
“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,” G20 leaders said in the communique.
The Reuters report noted that finance ministers and central bankers from the world’s 20 largest economies meeting in Buenos Aires will be told on Tuesday that such “crypto assets” do not threaten financial stability but can serve to launder money or finance terrorism and hurt consumers who buy them.
However, no action is expected to follow at the summit as policymakers have yet to agree on a common strategy to tackle the issue and some countries, including the United States, are wary of new regulation after a decade of rule-making in the wake of the financial crisis of 2008-2009, the sources said.
This pushes back the prospect of a global rule book on the matter, something that some regulators say is needed to tackle a phenomenon that transcends borders.
“It’s unlikely that the G20 will ask for new regulation,” one of the sources said.
A communique summarizing the thinking of summit participants was expected to be light on substance, merely promising vigilance and further study, according to Reuters citing sources.
Argentina’s central bank governor Federico Sturzenegger said there had been demand at the summit to come up with specific recommendations on aspects such as data-gathering at the G20’s next gathering in July.
Before any concrete action can come though policymakers will have to overcome their differences.
France, which along with Germany put cryptocurrencies on the G20’s agenda, has proposed taking specific steps, such as banning deposits and loans in such currencies and the marketing of investments based on them to the general public.
Its finance minister, Bruno Le Maire, said three-quarters of the summit participants were in favor of action.
“We have to find solutions and to define at a multi-lateral level and at the level of the G20 a fair and efficient regulation,” Le Maire said.
Italy’s central bank governor Ignazio Visco said he eventually expected the group of financial leaders to task global market regulator, the International Organisation of Securities Commissions (IOSCO), to come up with standards.