Libra May Spark the G20 Crypto Debate Japan Has Been Craving
The G20’s financial regulator says Facebook’s Libra project could lead the G20 to “take a closer look at cryptocurrencies” – playing into the hands of the Japanese government.
The G20’s Financial Stability Board (FSB) coordinates economic rules for member countries. Reuters quotes FSB head Randal Quarles as stating cryptocurrencies “do not currently pose a risk to global financial stability.” However, Quarles noted that “gaps may occur” where cryptocurrencies “fall outside the remit of regulators” or are not subject to international standards.
“A wider use of new types of crypto-assets for retail payment purposes would warrant close scrutiny by authorities to ensure that they are subject to high standards of regulation […] The FSB and standard setting bodies will monitor risks very closely and in a coordinated fashion, and consider additional multilateral responses as needed.”
As previously reported, Japan’s government is very eager to push the rest of the G20 to introduce cryptocurrency regulations – most likely focusing on the need to police exchanges and fight money laundering. Tokyo financial chiefs have as yet stayed relatively quiet on Libra, but talk about Facebook’s forthcoming token could spark a wider discussion on crypto-regulations at the meeting.
With so many items already on the G20’s agenda, some had felt that there may not be time for a cryptocurrency debate at the forthcoming Osaka summit – and that the issue might instead have to be discussed at forthcoming ministerial meetings to be held later in the year.
But with American politicians and European finance chiefs seemingly in an uproar over Facebook’s announcement, Tokyo may well seize its chance when the talks commence. The Bank of International Settlements last weekend also spoke of the need to “revamp” regulations in the light of the Libra announcement, and suggested that Libra may “pose a potential threat to competition, financial stability and social welfare.”
The G20 Summit begins on June 28 and concludes the following day. Also, executives from major crypto companies such as Circle, Coinbase, bitFlyer, Kraken and Huobi are among those going to meet representatives of the G20 in order to defend their business.