December 13, 2018

G20 Summit: Crypto Important For Global Economy

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The G20 in an international forum for both governments and central banks of countries with developing and developed economies, discussed issues pertaining cryptocurrencies. The forum was hosted in Buenos Aires, Argentina and took place on 30th November and 1st December.

Crypto Is Important. But Needs To Be Regulated

The declaration entitled ‘building consensus for a fair and sustainable development’ was published on the official sites for the European Council and the Council of the European Union. The document was a summary of issues agreed on in the 13th meeting of the G20 nations.

The issue of cryptocurrencies was among the top agendas of the summit. Although cryptocurrencies were mentioned in the broader contexts of ‘open and resilient financial systems’. It notes that they are crucial for the support of sustainable development.

G20 gave recognition to the importance of the cryptocurrency industry for the global economy. In an effort to fight off some of its bad images, the summit endorsed the introduction of Anti-Money Laundering and Terrorist measures per standards recommended by the Financial Action Task Force (FATF). The task force would be intergovernmental with the purpose of fighting terrorist financing and money laundering.

The summits otherwise expressed a positive attitude on the non-bank financial institutions and pointed out its associated advantages. According to the declaration, the participants said that they looked forward to progressing and attaining non-bank financial intermediation. Participants agreed to step up on their efforts to ensure that the maximum potential of financial technology’s technology is realized, while risks alleviated

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Taxation Of Cryptocurrencies

On the 2nd of December, according to Jiji, a Japanese news outlet, the summit also called for international taxation of digital currencies. The publication went ahead and noted the summit’s final text of a document prepared by the G20 leaders which outlined a taxation system for ‘cross-border electronic payment services’

The article also however clarified that although Japan’s law does not require the taxation of foreign companies which don’t have a base or factory in Japan, the G20 leaders sought a taxation system for the cross-border electronic services

The outlet also estimated the deadline of 2020 for the system to be in effect. It would be agreed upon after proposals from all member states have been brought to the table and discussed. Next year’s summit in Japan would discuss these issues in full.

Previous G20 Crypto Commentaries

For a long time, G20 maintained a hands-off approach to digital currencies. However in March, this year, France’s finance minister called for a debate on the issue of virtual currencies.

The July deadline agreed upon in March brought together different ideas on the regulation of cryptocurrencies although groups like the Financial Stability Board refused to come on board.

At the end of the conference, nothing much was agreed on while participants agreed to use more time to examine the issue further before making concrete regulatory moves. However, some countries like Brazil stated that they wouldn’t be following G20’s endorsements.

Actual recommendations on how to approach the cryptocurrency sphere at the international level are yet to be discussed and were pushed to a further date.

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