The G20 Agrees to Regulate Crypto
The international forum for the governments and central bank governors from the world’s 20 largest economies otherwise known as the G20 has decided to regulate the crypto sector.
The forum released a declaration which says:
“We will regulate crypto-assets for anti-money laundering and countering the financing of terrorism in line with FATF standards and we will consider other responses as needed.”
The G20 has previously maintained an open-minded stance in regards to cryptocurrency regulation, due to the encouragement of Japan which is the second largest cryptocurrency market behind the U.S., to regulate the space and provide a healthy ecosystem for both startups and established companies.
Several countries within the G20 have regulated their respective cryptocurrency sectors. But an effort to regulate the international crypto market could encourage countries like Russia, Argentina, and India that are still yet to establish clear regulatory frameworks around the asset class.
The G20 remarks that it intends to help crypto create an open and resilient financial system while emphasizing that it is “crucial to support sustainable growth.”
Although, over-regulation can hurt businesses in an early phase of growth, if countries within the G20 ensure that the policies they implement will not negatively affect the growth of cryptocurrency-related businesses to a significant extent, then the G20’s decision to regulate the global market could help eliminate the barrier between crypto and the traditional finance sector.
“We will continue to monitor and, if necessary, tackle emerging risks and vulnerabilities in the financial system; and, through continued regulatory and supervisory cooperation, address fragmentation. We look forward to continued progress on achieving resilient non-bank financial intermediation.”
More regulatory clarity will likely speed up the process of major financial institutions in establishing their own cryptocurrency ventures, they are patiently waiting for regulators to operate as trusted custodians.