The G20 Finance Ministers met in Japan over the weekend and published a communique. The group asked the Financial Stability Board (FSB) and other bodies to “monitor risks and consider work on additional multilateral responses as needed”.
This follows an FSB report published ten days ago in preparation for the meeting which concluded that currently, crypto-assets don’t present a global stability risk. However, it found there are regulatory gaps between jurisdictions. Furthermore, members have different opinions about the level of coordination to be attempted. The FSB concluded that, for now, the approach should be to continue monitoring rather than take action.
It appears the G20 is saying if there were co-ordinated action, what form might that be? Previously the FSB noted that, in part, the gaps relate to the definition of a security. For example, Bitcoin and Ether are not considered securities in some countries. Additionally, the FSB had stated that because of different legal frameworks, a coherent response is a challenge.
The G20 reaffirmed that it “remained vigilant” regarding risks including for consumer and investor protections, anti-money laundering (AML) and countering terrorism financing.
But the G20 announcement started with a positive message: “Technological innovations, including those underlying crypto-assets, can deliver significant benefits to the financial system and the broader economy.”
The reports considered by the G20 finance ministers were:
- IOSCO: Issues, Risks and Regulatory Considerations Relating to Crypto-Asset Trading Platforms–Consultation Report
- FSB: Decentralised Financial Technologies – Report on financial stability, regulatory and governance implications FSB
- FSB: Crypto-assets regulators directory – Financial Stability Board
- FSB: Crypto-assets – Work underway, regulatory approaches and potential gaps FSB