G20 to keep monitoring cryptocurrencies noting financial stability concern

Financial heavyweights spanning the world's top 20 economies said yesterday that they will continue to monitor cryptocurrencies, noting that "at some point they could have financial stability implications".

While acknowledging the pros of the likes of bitcoin and ethereum, saying they have the potential to "improve the efficiency and inclusiveness of the financial system", the G20 communique from an Argentina meeting still kept the possibility of regulation on the cards.

The document said:

Crypto-assets lack the key attributes of sovereign currencies. At some point they could have financial stability implications.

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 spotlight has been increasingly focused on cryptocurrencies, amid their growing popularity, but also concerns that they are fuelling money laundering and other criminal activity.

G20 finance ministers and central bank governors said crypto-assets "raise issues with respect to consumer and investor protection, market integrity, tax evasion, money laundering and terrorist financing".

In recent months, there has been more attention paid to digital currencies and the role they play, with the Treasury Select Committee saying last month it is to launch an inquiry into the likes of bitcoin to gauge how best to balance efficient regulation and helping support innovation.

The US Securities and Exchange Commission meanwhile, has said it would require digital asset exchanges to register with the agency.

Earlier this month, one of the top cryptocurrency exchanges Coinbase said it had secured a licence from the Financial Conduct Authority in the UK as it looks to bolster its British arm.

Coinbase, which is the largest cryptocurrency exchange in the US, said the new e-money licence from the FCA was an endorsement that its business meets certain anti-money laundering and processing standards.

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