Leaders of G20 agreed on regulating crypto assets
The leaders of the summit signed a document which was pledging sustainable development, as well as consensus building. Among a bunch of other things, the leaders of G20 also agreed to regulate crypto assets for anti-money laundering, as well as countering the financing of terrorism in line with FATF standards that they consider other responses as necessary.
This G20 declaration has actually touched on the international taxation of cryptocurrencies, having a plan for the member states to continue working together, in order to seek a consensus-based solution to address the effects of digitalization of the economy on the international tax system with some update in the year that comes, and a final report by the year 2020.
The G20 leaders also called for some global efforts in regulating cryptocurrencies, as well as curbing the financial crimes like money laundering or financing terrorism. Germany, which is the country member to the G20 bloc, was also calling for international cooperation in the process of regulating assets.
FSB says digital assets are not a threat for global financial security and stability
FSB or Financial Stability Board has released a report on the 10th of October about the future implications of digital assets on financial security and stability. In that report, FSB concluded that the digital assets are not any kind of threat for the global financial stability right now, as of its relatively small size. Such sentiments were also shared by the chairman of the U.S. Federal Reserve, named Jerome Powell.
The market cap of the cryptocurrency market has peaked at $830 billion earlier in January, but it has lost almost $700 billion since that time, failing to only a little over $130 billion.
But, the report has also noted that digital assets actually raise a few broader policy problems, as well as vigilant monitoring is entirely necessary for the light of the speed of market developments. The report also highlighted a few members of the FSB who were taking a range of approaches to regulating cryptos.
The declaration G20 has also announced the appointment of Randal K. Charles, being the chair of the FSB and is going to be deputized by Klass Knot too.
Keeping in line with the standards of FATF
FATF or Financial Action Task Force was established in 1989 as an initiative of the G7, and it develops policies for combating money laundering, as well as financial terrorism. The declaration G20 wants to actually step up the efforts to make sure that the potential benefits and advantages of the technology in the financial sector can actually be realized while some risks are mitigated.
Whereas the FATF has acknowledged that the legitimate use of the cryptocurrencies offers a few benefits and advantages. The agency, in fact, thinks that digital assets present AML or CFT risks, which include limited identification, anonymity, and verification of the crypto users, then lack of central oversight body, lack or some clarity, as well as supervision in enforcing those AML or CFT compliances.
One blockchain security firm, known as CipherTrace, which is based in San Francisco, has published a research report which shed more light on how the theft of the digital assets, as well as their usage by the criminals, has actually ushered in an entirely new era of some high-technology virtual money laundering. Further on, the report stated that cleaning crypto money is actually a complicated task which involves a few steps.