G20 watchdog holds fire on cryptocurrencies19.03.2018

This week, traders are closely watching the G20 summit in Buenos Aires, Argentina, to find out whether regulators are going to take any coordinated measures to tighten the policy on cryptocurrency. Fears regarding the event are well founded, since in recent months regulators have improved control over digital assets, citing the fight against money laundering, tax evasion and fraud.

In a letter to the heads of central banks and G20 finance ministers who will meet in Buenos Aires on Monday and Tuesday, published on March 18, the chairman of the Financial Stability Board (FSB) and the head of the Bank of England Mark Carney wrote:

"The FSB's initial assessment is that crypto-assets do not pose risks to global financial stability at this time. This is in part because they are small relative to the financial system," Carney wrote.

"Even at their recent peak, their (cryptocurrencies) combined global market value was less than 1% of global GDP," he added. “In comparison, just prior to the global financial crisis (in 2008), the notional value of credit default swaps was 100% of global GDP.”

The Financial Stability Board, which coordinates financial regulation within the framework of the G20 club, believes that it is necessary to focus on existing rules, rather than develop new ones. So, the Council, in spite of the fact that some members of the G20 supported the regulation of Bitcoins and cryptocurrencies, rejected their position.

However, given the global nature of the Cryptocurrency, Carney believes that "international coordination" in their respect is needed, capable of "filling in the gaps" in monitoring this fast-growing but still tiny sector, which is no more than 1% of world GDP.

It should be noted that Carney chose a very balanced position: on the one hand, he points to security problems in the cryptocurrency space, and on the other hand, says that the technology underlying the digital currencies can potentially "increase the efficiency and attractiveness of both the financial system and the and economy".
The cryptocurrency market has responded to the news with optimism. After Carney's statement, many cryptocurrencies began to show significant growth, and the market as a whole went up by almost $ 40 billion. Bitcoin overcame the $ 8,000 mark, and at the time of writing this article, its average market price is around $ 8,300. Among the altcoins, Cardano (16%), Stellar (17%) and Tron (18%) grew most.