State Heads at G20 Greet FATF Guidelines for Cryptocurrency Regulation
The recommendations include measures to assess risk, and to register entities handling digital assets.
The G20 meeting this year concerned itself directly with crypto assets, greeting the proposed guidelines by the Financial Action Task Force (FATF), an international body concerning itself with matters of financial regulation. In its official statement, the G20 leaders called for action regarding digital assets and financial technology.
“While crypto-assets do not pose a threat to global financial stability at this point, we are closely monitoring developments and remain vigilant to existing and emerging risks,” pointed out the official statement of the G20 meeting.
The next step for leading economies would be to adopt the approach of the recent FATF set of guidelines, and apply it to cases of handling, trading, transfering, or storing digital assets.
“We reaffirm our commitment to applying the recently amended FATF Standards to virtual assets and related providers for anti-money laundering and countering the financing of terrorism. We welcome the adoption of the Financial Action Task Force (FATF) Interpretive Note and Guidance.”
The FATF document suggested a series of measures, including the registration of virtual asset entities, which may include exchanges, brokerages, or anyone handling digital coins for third parties. The document also calls for monitoring countries and territories that may originate risk regarding money laundering or terrorist financing.
In past G20 meetings, the matter of digital currencies has been raised, with subsequent calls for regulations. As Bitcoin (BTC) trading becomes more influential and attracts attention, regulators are introducing limitations. In the past year, most leading exchanges already implemented customer tracking (KYC) and banned some countries and regions from participating in trades.
The G20 announcement coincided with a crash in BTC market prices, sliding from the $11,000 tier to $9,800 on Tuesday. But the statement may not be the triggering event that wiped out the recent price rally.
In the past months, the trading profile of BTC has also shifted, with notable participation of Chinese traders. In the past, Chinese traders supported a fiat market, but trading was banned due to capital controls. Now, Chinese traders seem to be back, with liquidity afforded by Tether (USDT), a stablecoin that dominates markets and allows for international transactions without limits.