The G20 summit, where leaders of 20 of the world’s largest economies gathered, took place in Buenos Aires, Argentina. Among the main topics discussed by the group was the regulation of cryptocurrency and the implementation of universal laws for the industry.
The discussions that took place in Argentina can massively impact the global cryptocurrency market. The main takeaway from the event was that leaders seek to regulate rather than ban the market. This comes as positive news as there were a lot of doubts as to how China, US, Japan and other countries would address the issue.
Below is a summary of the main points discussed during the G20 summit. The first detailed proposals for regulation should be presented around July this year, so it is important to be updated on the developments that will lead to the institutional legitimacy of cryptocurrencies and lead the way for major investors and financial markets worldwide.
- Countries should adopt cryptocurrency and blockchain
World leaders of the G20 recognize the inclusive power of cryptocurrencies. Furthermore they understand that they can and must assist governments in expanding welfare policies.
- Countries must acknowledge the end of the traditional economy
The traditional economy is going through a transition process and it is no longer possible to set the economy apart from the digital age.
- Regulation is Unavoidable
G20 leaders all agree that regulation for the cryptocurrency industry is inevitable and necessary, and although it is digital, the citizens and businesses are real and are embedded in a country. Rules must, therefore, be imposed just like in any other types of business.
- Regulate not ban
There is a collective agreement among G20 members on the importance of cryptocurrencies and that they represent an economic revolution and social organization. Therefore, banning is not completely possible. They do, however, have to go through a regulation process.
- Regulation will not hamper technological developments, but taxation is almost certain
Regulatory processes will be managed with utmost care so strict rules that hamper technological developments will not be imposed. However, the application of fees, through taxes, is practically certain.
- The first regulatory proposals will be released in July
The authorities in charge of the G20 regulatory proposals will be composed of the central bank presidents, the Financial Action Task Force or FAFT and the Organization for Economic Cooperation and Development (OECD). The first proposals for regulations will be released in July this year.
- Countering Crimes
The regulatory proposals will focus mainly on the prevention of any criminal or illegal activities, such as financing terrorism, money laundering and avoidance of currency. Furthermore, the proposals will also push for consumer protection measures, ie avoiding scams via ICOs, cryptocurrency projects and the like.
- KYC and Tracking
There remains no agreement on how or whether crypto-related activities should be tracked or tagged so it is possible to identify where they came from and where they are heading. Digital identity and KYC should be important points in the discussions.
- Europe wants to head the regulation process outside the G20
Europe plans to lead the process of regulating cryptocurrencies, but has no plans to wait for the G20s position on the matter in July.
While the subject has not been acknowledged at official meetings, self-regulatory processes have been already implemented in Japan.