By
Mayowa Adebajo
March 28th, 2024
Following June 9 G20 meeting in Fukuoka, Japan, the G20 finance ministers, and central bank governors filed a request with the Financial Stability Board (FSB) to monitor cryptoassets-associated risks.
Finance ministers and central bank chiefs from the Group of 20 (G20) major economies asked international organizations, including the International Organization of Securities Commissions (IOSCO), Financial Action Task Force (FATF), and the Financial Stability Board (FSB), to consider working on additional multilateral responses as needed, and showed support to the ‘draconian’ KYC-related suggestions that would affect virtual asset service providers and their clients.
The regulators said crypto assets do not pose a threat to global financial stability at this moment, but they shall remain vigilant to risks related to consumer and investor protection, anti-money laundering and countering the financing of terrorism.
Dave Hodgson, Director and Co-founder of NEM Ventures, said that the FSB’s analysis of decentralised financial technologies and regulatory challenges is encouraging, adding that he looks forward to more concrete recommendations in the future. He said:
“It would be beneficial to hear from the FCA in the UK and the SEC in the US as they have thus far been quiet on their preferred approach. As a result, companies have been reliant on self regulation combined with hefty punishments in these jurisdictions for those who have fallen victim to this regulatory uncertainty.
It is also critical to consider the role that proactive regulators such as Gibraltar, Malta, Bermuda, Switzerland, and Germany will play – as regulatory certainty will allow the population to operate how it wishes, while being legally compliant.”
The joint Communiqué says:
“Technological innovations, including those underlying crypto-assets, can deliver significant benefits to the financial system and the broader economy.”
However, after optimism, the authors of the paper raised concerns over new technologies saying:
“While crypto assets do not pose a threat to global financial stability at this point, we remain vigilant to risks, including those related to consumer and investor protection, anti-money laundering (AML) and countering the financing of terrorism (CFT).”
Except for the risks, the document notes that there are also benefits of blockchain for the economy:
“Technological innovations, including those underlying crypto-assets, can deliver significant benefits to the financial system and the broader economy.”
The G20 leaders reaffirmed their commitment to applying the recently amended FATF Standards to virtual assets and related providers for Anti-Money Laundering (AML) and Counter-Financing of Terrorism (CFT).
“We look forward to the adoption of the FATF Interpretive Note and Guidance by the FATF at its plenary later this month.”