The G20, after a meeting of the finance ministers and central bank governors, has moved the deadline for reviewing cryptocurrency anti-money laundering (AML) standards to October 2018. This decision was contained in a communique released at the end of the two-day meeting which lasted from July 20 to 21 in Buenos Aires, Argentina.
In March, the body tasked its financial regulations arm, FATF to come up with definitive recommendations for a global approach to cryptocurrency. Four months later, the organization appears to have softened its stance toward cryptos.
G20 Acknowledge benefits of Crypto-Assets
Notably, its report recognized certain benefits of crypto-assets while setting a deadline for the FATF to “clarify” its position on cryptocurrency standards.
A section of the report read:
“Technological innovations, including those underlying crypto-assets, can deliver significant benefits to the financial system and the broader economy”
It also noted that “crypto-assets do not at this point pose a global financial stability risk.”
However, the report called on members to be “vigilant” warning that crypto-assets could cause some problems with regards to “consumer and investor protection, market integrity, tax evasion, money laundering and terrorist financing.”
Contrary to widely held perception, studies have shown that cryptocurrencies don’t encourage criminal activities any more than fiat currencies do. A study by Hong Kong’s Financial Services and Treasury (FSTB) showed that cryptocurrency was not used in organized crime.
“We reiterate our March commitments related to the implementation of the FATF standards and we ask the FATF to clarify in October 2018 how its standards apply to crypto-assets”
FATF, short for Financial Action Task Force, was formed with a responsibility to tackle money laundering and terrorist financing. In February, the EU and 35 member countries of the FATF agreed to revise the cryptocurrency standards.
While a global standard for cryptocurrency may sound interesting, it will not come easy as countries vary in their approach toward cryptocurrency. While some actively regulate cryptocurrencies, others choose to avoid strict regulations.