The Group of Twenty or G20 held a meeting this week in Buenos Aires. Participating countries include Argentina, Australia, Brazil, Canada, China, Germany, France, India, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia, South Africa, South Korea, Turkey, the United Kingdom, the United States plus the European Union.
At the close of the G20 Meeting, an official communique was released and a brief portion address technological innovation and crypto-assets in general. The document states:
“We acknowledge 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. Crypto- assets do, however, raise issues with respect to consumer and investor protection, market integrity, tax evasion, money laundering and terrorist financing. Crypto-assets lack the key attributes of sovereign currencies. At some point they could have financial stability implications. We commit to implement the 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. We call on international standard-setting bodies (SSBs) to continue their monitoring of crypto-assets and their risks, according to their mandates, and assess multilateral responses as needed.”
The statement is a benign acknowledgement that digital or cryptocurrencies are still in its infancy. The market for these new digital assets is tiny in comparison to more traditional financial vehicles. The statement by the G20 reflects a recent comment by the Financial Stability Board (FSB), the international body that monitors and makes recommendations about the global financial system, that was published in advance of the meeting in Buenos Aires. The FSB is chaired by Bank of England Governor Mark Carney who attended the G20.
A growing global consensus appears to be emerging that reflects a willingness to embrace the potential of Fintech innovation, perhaps Blockchain more directly. The G20 said that “digitalisation,” is fundamentally reshaping the global economy. While this transition creates new challenges for private and public sector alike, international cooperation is needed to “harness the opportunities and ensure the benefits are shared by all.”
