WASHINGTON (Reuters) – a Group of 20 financial leaders on Friday agreed to the strict regulations on cryptocurrencies such as Facebook’s Scale, with the caveat that the issuance of such a “stablecoins” should not be allowed to result in different global risks they pose have been addressed.
FILE PHOTO: International Monetary Fund logo is seen at the IMF/world bank spring meetings in Washington, d.c., USA, April 21, 2017. REUTERS/Yuri Gripas
The agreement came after the G7 group warned that, if launched on a large scale, stablecoins, digital currencies, are usually funded by the traditional, money, and other resources, and can pose a threat to the world’s monetary system and financial stability.
The financial leaders of the G20 major economies has agreed that, while stablecoins potential benefits of financial innovation, giving rise to a set of serious public-policy-and-regulatory risks.
“With such risks, including, in particular, those relating to money laundering, illicit financing, and the protection of consumers and investors, need to be evaluated and adequately addressed before these projects begin operation,” the financial G-20 leaders said in a news release after the meeting.
Bank of Japan Governor Haruhiko Kuroda said that the G20 summit will kick-off the debate over how to regulate the stablecoins on the basis of the proposals that will be received by the standard-setting bodies as the Financial Stability Board (FSB) and the Financial Action Task Force (FATF).
“Policy-makers have expressed their concern about the risks stablecoins to form. Until they are addressed, stablecoins, it should not be published. Which was agreed to by the members of the G-20,” Kuroda told a news conference organized by the japanese, which will be presided over this year’s G-20 meeting.
The FSB and the FATF are expected to report their findings on stablecoins to the G-20 next year.
The G-20 has asked the International Monetary Fund for a study of the economic impact, including monetary sovereignty, the problems, according to the press release.
“A number of emerging and developing countries will have to worry about what’s going to happen when the stablecoins are supported by a large customer base and can be used on a large scale globally,” said Kuroda, who is among the world’s financial leaders met in Washington this week, the international monetary fund and World Bank fall meetings.
“But this isn’t just a problem in emerging economies. It could have a broader impact on the conduct of monetary policy and the financial stability of the system,” he said.
The g-20 group insisted that the terms of the global policy-makers on stablecoins, such as the monitor, which was a part of for a quarter of the original members who initially supported the project.
The German Finance Minister, Olaf Scholz, on Friday, the doubles were critical to the balance, saying: “the creation of a new world currency is to be avoided.
Reporting by Leika Kihara; Editing by Paul Commented