Many studies conclude that regulating Digital Assets can often yield positive results on the Cryptocurrency market that is still in its infancy stage. All that needs to be adhered to by regulators is goodwill to nurture the industry and to redirect Crypto trading and transactions in the right direction. However, regulations too can hinder progress particularly when they entail banning, or restricting a primary or secondary use of Cryptos.
The G20 summit that was concluded on Saturday 1st December in Buenos Aires, Argentina has once again renewed efforts in calling on all governments in the World to create standards that all market participants will have to abide with. The key goals that the world’s richest and most influential countries want to enforce include; protecting Crypto investors, encouraging the growth of Blockchain technology and Crypto markets, and regaining control over economic activities.
Some countries such as the US, India, China, Japan, South Korea, Malta, Bermuda, Hong Kong, etc. already have laws in effect that impact the use of Cryptos. However, the policies are diverse and lack a common ground that is ideal in regulating the global and borderless industry.
Fair And Sustainable Development Will Mitigate The Risks Of DLT
Leaders from the globe’s most influential and powerful nations issued a joint declaration of enforcing and promoting a “fair and sustainable development” approach for Cryptocurrencies. The aim of the strategy is to mitigate the myriad of risks that are a challenge to Crypto usages such as security risks from Cybercriminals, volatile prices, uncertain/vague/ambiguous legislation, and even negative publicity from some media channels. Most importantly, the G20 wants to have internationally accepted standards that underpin the market.
The G20 Views Cryptos As An Emerging Financial System
Members of the G20 have always aspired to create opportunities to spur economic growth not only in their respective countries but all over the world as well. For this regard, Blockchain technology and Cryptos are the new dimensions of the financial system that the G20 wants to strengthen as a futuristic mode of payment.
To achieve this, the G20 leaders have proclaimed that they would institute mechanisms of monitoring emerging risks and vulnerabilities that Crypto-based transactions are prone to. This is being done in order to enforce or undertake supporting initiatives of regulation such as supervisory cooperation, address fragmentation, etc.
Also, the leaders wish to get rid of other risks such as money laundering and terror financing in accordance with the Financial Action Task Force (FATF) threshold.
The G20 Has Influential Capabilities
The G20 is a summit for Central Bankers, Ministry of Finance officials, and leaders from the globes 20 most influential and strongest economies per region such as South Africa for Africa; USA, Canada, Mexico, Brazil and Argentina for Americas; India, Japan, China, etc. for Asia; UK, Germany, France, and Italy for Europe, and other countries. The members have an 85% share of global GDP, 75% share of trade, and 66% of global population.
In July 2018, G20 finance ministers and central bankers in response to calls from France, Germany, and Japan reached a conclusion that Cryptocurrencies are not a risk to financial stability. However, they appealed to the FATF to rewrite its stance on Digital Assets.