Bitcoin price rises after G20 regulators discuss crypto regulation

Bitcoin price rises after G20 regulators discuss crypto regulation

On March 20, the member nations present at Argentina’s G20 Summit announced an agreement to examine cryptocurrency regulation and prepare recommendation by July 2018. These recommendations will be the first step toward unified regulation of cryptocurrency.

As a result of this news, the price of Bitcoin has risen above USD 8,500.

While no serious actions were guaranteed, the world’s economic leaders have agreed to monitor the cryptocurrency industry and to develop recommendations for future regulation.

Coindesk translated the G20 communique: “We call on international standard-setting bodies to continue their monitoring of crypto-assets and their risks, according to their mandates, and assess multilateral responses as needed.”

One trend of the G20 is the preference to refer to cryptocurrencies as “crypto-assets.” This highlights the fact that cryptos do not have key attributes of sovereign currencies.

Klaas Knot, president of De Nederlandsche Bank and also the member of FSB’s standard committee on assessment of vulnerabilities said:

“Whether you call it crypto assets, crypto tokens — definitely not cryptocurrencies — let that be clear a message as far as I’m concerned. I don’t think any of these cryptos satisfy the three roles money plays in an economy.”

Crypto discussion at G20 instills positivity in crypto market.

Before now, crypto had not been discussed by the G20. Its presence at this year’s conference is significant. It demonstrates that G20 members believe that cryptocurrencies are significant enough in the global financial system to warrant regulatory attention. Britain is itself putting together a “crypto asset task force” to put Britain at the forefront in the development of the technology,” said The Times. Members of the Treasury, Bank of England and FCA will make up the British task force.

Coinspeaker analysed various statements from G20 members. The head of Argentina’s Central Bank, Frederico Sturzenegger, said cryptocurrencies should be examined because more information is needed before making any regulatory decisions. The July deadline is a short one and is no doubt influenced by the fluctuating nature of the crypto market.

Italy’s central bank governor, Ignazio Visco, suggested the International Organisation of Securities Commissions (IOSCO) be entrusted with the task of defining industry standards.

Opinions vary between G20 members. A senior Japanese finance ministry official said that some form of regulation for crypto-assets should be eventually introduced. In contrast, Brazil’s Central Bank president, Ilan Goldfajn, announced that cryptocurrencies won’t be regulated in his country.

The effect of the G20 on crypto

The positive tone struck in Argentina has prompted a boost on the crypto market. The price of Bitcoin first increased above USD 9,000, reported Coinbase. In addition to Bitcoin, other major cryptocurrencies like Ethereum and Ripple also showed good recovery on Monday. Ethereum which slipped below $500 made a 10% to hit the high of $557. Similarly, Ripple that was trading below $0.60 made a 20% surge to hit a high of $0.71 on Monday.

Why are regulators so interested in crypto?

This year and last, there has been a plethora of statements from regulators as to the legal definitions and requirements regarding cryptocurrencies, assets, tokens or any other terminology used. Most jurisdictions have strict statutory requirements for securities offerings. This is to protect the rights of whose investing and the securities market in general.

Regulators are interested in crypto for another reason. Tax.

Bloomberg reported that G20 countries want cryptocurrencies to be recognized as an asset and not money to crack down on tax evasion through crypto investments. Moving cryptocurrencies into asset class would make them subject to capital gains tax.

By Grace Appleford, Research Analyst.

Share
Share on facebook
Share on google
Share on twitter
Share on linkedin
Related Posts
Featured
This infographic gives an overview of how the different sectors within the ecosystem are positioned in the financial services value chain.
Widening the scope across borders this new production will not only include the Dutch fintech scene but highlight developments on a European level as well.

This website uses cookies to ensure you get the best experience on our website.
To learn more, read our privacy policy.

X
X