Regulators and policymakers around the world still haven’t come close to getting their heads around cryptocurrencies, but they are trying.
The G20 meeting of finance ministers and central bank governors, which met in Buenos Aires in March, acknowledged their growing importance in the world economy, calling on “international standard-setting bodies to continue their monitoring of crypto-assets and their risks, according to their mandates, and assess multilateral responses as needed”.
The G20 communique acknowledged that “technological innovation, including that underlying crypto-assets, has the potential to improve the efficiency and inclusiveness of the financial system and the economy more broadly”.
However, it warned of the increased risks around consumer and investor protection, market integrity, tax evasion, money laundering and terrorist financing.
“Crypto-assets lack the key attributes of sovereign currencies,” it states. “At some point they could have financial stability implications. We commit to implement the Financial Action Task Force (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.”
The scale of this challenge is perfectly illustrated by the confusion among US regulators regarding who is responsible for this oversight – and even what it is exactly they are overseeing.