World Economy

G20 Monitoring Crypto Impact on Global Economy

G20 says cryptocurrency can deliver significant benefits  to the financial system and worldwide economy.G20 says cryptocurrency can deliver significant benefits  to the financial system and worldwide economy.

Finance ministers from the world’s 20 largest economies say they’re cautiously optimistic about the impact cryptocurrency can have on the world economy.

A new report from the G20 meeting in Argentina states that “technological innovations, including those underlying crypto-assets, can deliver significant benefits to the financial system and the broader economy”, Coindesk reported.

The report also highlights the Wild West nature and volatility of the market, noting that cryptocurrencies “do, however, raise issues with respect to consumer and investor protection, market integrity, tax evasion, money laundering and terrorist financing”.

As for what benefits cryptocurrencies may bring to the financial markets, the finance ministers did not elaborate. They do, however, point out that the cryptocurrencies, which are decentralized, “lack the key attributes of sovereign currencies”.

The G20 says it will continue to study the long-term impact of crypto on the world’s economy, and says it will actively monitor developments in the cryptocurrency space.

G20 member countries are now looking at an October deadline for reviewing a global anti-money laundering standard on cryptocurrency, document shows.

According to a statement issued on Sunday, finance ministers and central bank governors of the G20 member countries hosted a meeting on July 21-22 in Buenos Aires, Argentina, and reiterated their position on “vigilant” monitoring over cryptocurrency.

The member countries further called on the Financial Action Task Force–an intergovernmental body formed to fight money laundering and terrorist financing–to clarify in three months how its existing AML standards can apply to cryptocurrency.

“While crypto-assets do not at this point pose a global financial stability risk, we remain vigilant. ... We reiterate our March commitments related to the implementation of the FATF standards and we ask the FATF to clarify in October 2018 how its standards apply to crypto-assets,” member countries said in the document.

As previously reported by CoinDesk, the G20 initially asked for an AML standard on cryptocurrency from the FATF in March, as part of its wider push for global regulatory recommendations on the issue.

Last month, it was reported that the FATF is planning to develop binding rules of AML for the world’s cryptocurrency exchanges, following a February report that the agency would step up its scrutiny effort over crypto money laundering.

Early last week, the Financial Stability Board, an organization focused on analyzing and making recommendations to the G20 on global financial systems, presented several key metrics for monitoring crypto assets ahead of the weekend meeting, in a response to the G20’s request in March of this year.

Back in March, G20 leaders agreed to gather more information on the impact of cryptocurrencies before considering any potential regulations.

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