The Group of 20 major economies grouped together as the G-20 is progressing with its aim to understand and find space for cryptocurrencies within the world economies. Their latest drive is a push for a registry for cryptocurrency exchanges to help curve potential money laundering.
It is expected that the G-20 will soon come to an agreement on this registry after formally recognising and taking head of the cryptocurrency market place only about a year or so ago.
Finance ministers and central bankers from the bloc will discuss challenges surrounding digital currencies, including money laundering and customer protection, at a meeting in the Japanese city of Fukuoka, Japan, in early June.
Concerns for central banks
There is no getting away from the fears that central banks have over digital currencies which operate decentralised and thus with no control point. They are borderless and mostly unregulated pushing those in the G-20 to try and get a regulatory framework in place for the exchanges.
It is also the anonymous nature, and the fact that the banks are cut out of knowing what transactions take place, that make digital currencies a potential hot bed for money laundering.
Japan, this year’s meet up host, has taken the lead in restricting these instruments trough their own controls of exchanges.. The country became the first to create a registry for cryptocurrency exchanges in April 2017, and it also has experience enforcing regulations, as it did after hackers stole over $500 million from Coincheck, and previously from the infamous Mt. Gox hack.
Meeting of the minds
Since cryptocurrencies and their related ecosystem has come under regulatory scrutiny there has been a swath of different approaches taken. Some, like China, have banned them out right and block access to exchanges.
This causes conflict as to how a body like the G-20 should regulate them, but also pushes further for an agreed upon standpoint as the banning of cryptocurrencies in China is an easy work around when other neighbouring companies have less stringent rules on how to operate the borderless digital currencies.
In order to help countries work together to curb illegal activities, the Financial Stability Board, an international body of financial regulators, published a directory of cryptocurrency regulators in April, which will be submitted to the G-20.
The Financial Action Task Force had said in October 2018 that virtual asset service providers ought to be subjected to anti-money laundering regulations.
“They should be licensed or registered and subject to monitoring to ensure compliance,” the policymaking body said.