Ahead of the international G20 forum, investors awaited indication of how regulators would react to the digital currency landscape. With central bank governors and government leaders from 19 individual countries present, this year’s G20 in Argentina seemed like a prime opportunity for answers to some of the industry’s most pressing questions. Now, a G20 official announcement calls for regulatory suggestions by July 2018.

Regulation continues to remain a looming threat for the digital currency industry. However, some blame regulatory uncertainty for playing a role in the volatility of major digital currencies and state that clear regulation could benefit – rather than hurt – the industry in the long-term.

G20 calls for regulation recommendations by July

While some feared harsh regulatory actions at G20, it appears that strict regulations are not yet on the table. Instead, the announcement calls for the Financial Stability Board (FSB) to consult with its contemporary institutions like the Financial Action Task Force (FATF), in order to deliver its findings in July 2018.

Further, the announcement refers to digital currencies as “crypto-assets,” suggesting that G20 members do not view currencies like Bitcoin and Ethereum as currencies. The document goes on to acknowledge that the “borderless and intangible nature” of digital assets is reshaping the global economy.

“Transformative technologies are expected to bring immense economic opportunities, such as new ways of doing business, new industries, new and better jobs, and higher GDP growth and living standards,” it stated.

 

Additionally, G20 members acknowledge that technological innovation, including “crypto-assets,” could improve efficiency and inclusiveness in the global economy. However, it also stated that digital currencies present issues with tax evasion, money laundering, illicit spending, and risks to investors.

“At some point they [digital currencies] could have financial stability implications,” it said. “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.”

Regulation could help projects in the industry

While regulations are a difficult balancing act, and harsh rules could stifle the industry’s growth, some proponents state that agreeable regulation could help the industry overcome some of its major challenges.

Currently, some investors fear a potential “crackdown” and experience general uncertainty about the future of the digital currency industry. This is one area where regulation could actually help to reduce speculation, as clear guidelines could help investors and businesses operate without fear of unexpected legal consequences.

“We have no law, no structures, nothing to base ourselves on,” said Leadweb CEO, Louis Cleroux, in a previous discussion with Coinsquare Discover.

Cleroux added that blockchain and digital currency businesses in Canada currently experience difficulty operating in a space without clearly defined laws or regulations. This, he explained, creates uncertainty for businesses and prevents growth.

While the G20’s call for regulation recommendations by July will be undoubtedly divisive, clear regulation could help the industry, provided it does not step on the toes of investors or innovation.

 

Image credit: G20 logo

 

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