G-20 asked Members to Implement Cryptocurrency and Stable coin Standards released by FATF
In the very first meeting of G20 this year in Saudi Arabia, crypto assets and stable coins were discussed prominently by the global financial authorities including the Central Bank Governors and Finance Ministers of G-20 nations.
The G-20 authorities urged the members to implement the crypto assets standards set by the Financial Action Task Force (FATF). The members were also informed that the Financial Stability Board (FSB) will soon issue crypto regulatory responses.
G-20 Discusses Crypto Regulations
The first meeting of G-20 in 2020 was held in Riyadh, Saudi Arabia, on Feb. 22 and 23 in which Finance Ministers and Central Bank Governors discussed the future financial crisis issues and the global economic agenda and the role of cryptocurrencies in the future. Facebook’s digital currency project Libra had also been discussed apart from cryptocurrencies and stablecoin.
In continuation with the last year's June meeting in Osaka Japan in which commitment towards standards for Crypto assets had been declared, this year’s meeting took the discussion one step ahead.
Topics that were discussed prominently included crypto assets, stablecoin Facebook upcoming Libra among others.
After the G20 communique, the Finance Chief stated that global economic growth is expected to pick up modestly in 2020 and 2021. His Statement further echoed that they will augment global risk monitoring including the recent outbreak of coronavirus disease.
Discussion about Stablecoin
In the February 23 statement, the G20 authorities addressed specifically the stablecoin issue.
The statement said, “We reiterate our statement in October 2019 regarding the so-called global stablecoins and other similar arrangements that such risks need to be evaluated and appropriately addressed before they commence operation and support the FSB’s efforts to develop regulatory recommendations with respect to these arrangements.”
The G-20 is expecting a report on stablecoins and cryptocurrencies from global standard-setting bodies’ including the financial stability board (FATF) and the International Monetary Fund (IMF).
Meeting had been attended by ECB Chief Christine Lagarde and Federal Reserve Chairman Jerome Powell as well.
Following the last Summit in Japan, G-20 issued a press release in October 2019 on global stable coins
It said, “While acknowledging the potential benefits of financial innovation, we agree that global stablecoins and other similar arrangements with potential systematic footprints give rise to a set of serious public policy and regulatory risks.”
The statement further suggested evaluation and appropriate prohibitive measures against money laundering and illegitimate finances protecting consumers' and investor’s rights.
FCB’s Crypto Policy to be Framed soon
In the statement released on February 23, the G20 Finance Chief said, “We asked the FSB in coordination with the Committee on Payments and Market Infrastructures (CPMI) and other relevant standard-setting bodies and international organizations to develop a roadmap to enhance Global cross border payment arrangements by October 2020.
The FSB includes all the central bankers and governments of major economics and other regulators.
Prior to the G20 meeting, FSB Chairman Randal Quarles dispatched a letter to the G20 Finance Ministers and Central Bank governors in which he had touched the cryptocurrency and stable coin topics.
The letter mentions that while the global financial system is facing new challenges simultaneously technology is changing the face of the traditional finances. The non-banking sector has been proliferating so much so that it requires assessment and coordination between the regulatory and supervisory authorities. It further stated that pressure leading to market fragmentation does exist and the regulatory and supervisory issues require more focus.
Quarles added that the FSB is resolved to accelerate the pace and regulatory responses to these new instruments. The FSB will issue an exclusive report addressing the regulatory issues and their possible responses for public consultation in April 2020.
What is the G-20 Group?
The G-20 group also called a group of 20, is a prominent group of 19 economies which includes financial authorities such as the Central bank governors and finance ministers including the European Union and developing nations as well. The G20 had been established in 1999, with objectives including the promotion of international trade, global economic growth, and regulation of financial markets.
CBW - External Analyst