Just when the entire crypto markets were seen correcting heavily last week, the G20 regulators instilled positivity back within the crypto community with some positive statements on digital currency regulations. On March 18, just a day before the G20 Buenos Aires summit meetings were to begin, the Financial Stability Board (FSB) wrote a letter where Chairman Mark Carney said that there is no immediate need to regulate digital currencies as of now.
The constant talks of enforcing global regulations on crypto operation had caused fear and panic in the crypto community over the last few weeks causing the markets to move sideways. Mark Carney in his letter mentions that at present digital currencies contribute a very small part of the global financial system and hence they don’t pose enough risks. Carney wrote: “The FSB’s initial assessment is that crypto-assets do not pose risks to global financial stability at this time. This is in part because they are small relative to the financial system.”
Soon after the news broke out, a new wave of positivity and optimism swept the crypto markets back. Bitcoin made a sharp recovery on Monday of about $1200. The cryptocurrency has slipped below $7500 levels and on Monday, March 19, it was seen making a high of $8673.46, according to the data on CoinMarketCap.
Bart Stephens, co-founder and managing partner at Blockchain Capital said that it should be noted that the FSB’s announcement doesn’t completely wipe out the possibility of crypto regulations in future, but it certainly gives crypto investors some space to breathe in this heavily correcting market. Stephens said: “The G-20 news over the weekend helped crypto prices. Or at least, the G-20 news could have been a lot worse.”
Joe Van Hecke, founder and managing partner at Grace Hall Companies commented on similar lines saying “There were some positive comments from the Financial Stability Board today that created some much needed bullish news for bitcoin and cryptocurrencies in general. The space has been hammered over the past few months with a spate of bad press.”
All the finance ministers from the G20, who are seen cracking down on issues of tax evasion through crypto investments will surely be discussing this topic at length. As reported by Bloomberg, the G20 countries want cryptocurrencies to be recognized as an asset and not money and hence will be moving a consensus for the same. Moving cryptocurrencies into asset class would make them subject to capital gains tax.
Klaas Knot, president of De Nederlandsche Bank NV and also the member of FSB’s standard committee on assessment of vulnerabilities said: “Whether you call it crypto assets, crypto tokens — definitely not cryptocurrencies — let that be clear a message as far as I’m concerned. I don’t think any of these cryptos satisfy the three roles money plays in an economy.”
In addition to Bitcoin, other major cryptocurrencies like Ethereum and Ripple also showed good recovery on Monday. Ethereum which slipped below $500 made a 10% to hit the high of $557. Similarly, Ripple that was trading below $0.60 made a 20% surge to hit a high of $0.71 on Monday.
Today, the G20 ministers are scheduled to discuss the issue with crypto and thus by the day end, we expect more clarity from the G20 on the crypto regulations.