Reuters has reported that Japan is planning to encourage the G20 counterparts to tighten cryptocurrency regulations that help prevent cryptocurrencies from being used for money laundering. This was said by the Japanese government official.
Different countries have already approached this issue differently. This means that there are no global standard approaches and chances that this will be given priority by the G20 finance leaders as an agenda item for discussion in a joint communique are low.
Another official intimated that the conversation will address consumer protection and anti-money laundering measures and not about cryptocurrency trading’s impact on the banking system. There is a resistance by the G20 countries regarding imposing strict rules on the crypto sector.
The G20 finance ministers and central bankers are scheduled between March 19 and 20 this year in Buenos Aires. They have already itemized cryptocurrencies on the agenda list.
In the meeting, the Financial Action Task Force (FATF) will be presenting their report on keeping cryptocurrencies from being used in money laundering. FATF is a group of 37 nations that were set up by the G7 industrial powers to counter illegal finance operations and dealings.
Japan has been wary with the way different countries have been applying different levels of strictness on the cryptocurrency issues. According to an official of the Japanese government, this approach has left many gaping loopholes for money laundering to take place undetected.
Cryptocurrency monitoring was first started in Japan. Several exchanges were put on the radar after a heist hit Coincheck Inc. exchange this year that led to the loss of $530 million.
Germany and France have already shown commitment to regulate Bitcoin. The European Union has been of the view that short-term strategy could involve the application of anti-money laundering and terrorism financing as well as warning consumers against investing in cryptocurrencies. They could also go as far as warning banks against holding the cryptos!
Different nations have been experiencing problems of effecting these rules without undermining cryptocurrency and Fintech innovation. While controlling cryptocurrencies is a welcome idea, this is a fast-growing sector that requires enough room to grow. Strict regulations could starve it of the needed space for that growth to continue.