G20 to Scrutinize Crypto Anti-Money Laundering Rules
G20 member countries are scheduled to delving into a global anti-money laundering (AML) regulations on cryptocurrency in October this year, the group said in a statement.
“We reiterated our March commitments related to the implementation of the FATF [Financial Action Task Force] standards and we ask the FATF to clarify in October 2018 how its standards apply to crypto-assets,” the G20 said in its communique.
“While crypto-assets do not at this point pose a global financial stability risk, we remain vigilant. We welcome updates provided by the FSB [Financial Stability Board] and the SSBs [standard-setting bodies] and look forward to their further work to monitor the potential risks of crypto-assets, and to assess multilateral responses as needed,” it said, adding these assets “lack the key attributes of sovereign currencies.”
The group recognized that technological innovations including the underlying crypto-assets can provide significant benefits to the financial system and the broader economy. However, such virtual assets raise issues related to consumer and investor protection, market integrity, tax evasion, money laundering, and terrorist financing.
Over the weekend, G20’s finance ministers and central bank governors held a meeting in Buenos Aires, Argentina to discuss various issues concerning the group such as global economic growth, policy tools, emerging technologies, and financial system, among others.
The FSB had submitted to the G20 countries’ finance ministers and central bank governors a framework for the oversight of cryptocurrency assets along with a report. The board said in the report it would keep an eye on the developing crypto marekts and “should help to identify and mitigate risks to consumer and investor protection, market integrity, and potentially to financial stability.”
“While the FSB believes that crypto-assets do not pose a material risk to global financial stability at this time it recognizes the need for vigilant monitoring in light of the speed of market developments,” the organization said, adding it would regularly collate reports to ensure market confidence.
Earlier this year, the G20 asked the FATF for an AML standard on virtual currencies as part of its greater push for global regulatory recommendations on the matter. It had set a July deadline to complete the task.
“In July we have to offer very concrete, very specific recommendations on, not ‘what do we regulate?’ but ‘what is the data we need?’” Argentina Central Bank chair Frederico Sturzenegger said at that time.
“We commit to implement the FATF standards as they apply to crypto-assets, look forward to the FATF review of those standards, and call on the FATF to advance global implementation. 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,” the G20 said in a statement in March.
Previously, an unidentified Japanese official disclosed the task force had said it is planning to draft rules for monitoring cryptocurrency exchanges around the globe. This was initiated by calls for a globally coordinated regulations on crypto bourses. The official said the discussions, which began on June 24, would determine whether the rules are still applicable, how they could be enforced, and how to collaborate with nations that have already prohibited currency trading.