At the end of the last meeting of the countries that make up the G20, the leaders of the group called “criticism” the need for international rules to regulate bitcoin and other cryptocurrencies, stating that the potential risks to “financial stability” need to be mitigated with urgency.
The announcement follows the collapse of FTX, which caused a domino effect and in addition to hurting investors and companies, gave reasons for global regulators to close the noose on the sector. The Group has the participation of Presidents, Ministers of Finance and Presidents of Central Banks from 19 countries, including Germany, Brazil, China, United States and others. The G20 Leaders’ Declaration was issued following the conclusion of the two-day summit in Bali attended by top global leaders.
“We welcome the continued work by the FSB and international standard setters to ensure that the ‘crypto asset’ ecosystem, including so-called stablecoins, is closely monitored and subject to robust regulation and supervision to mitigate potential risks to financial stability.” 🇧🇷 says the statement issued by the White House and other countries that are part of the G20. FBS is a global financial standard setter that has proposed rules that would subject companies and cryptocurrency markets to the same strict rules that govern traditional finance. The G20 statement added:
“We welcome the approach proposed by the FSB to establish a comprehensive international framework for the regulation of crypto-asset activities based on the principle of ‘same business, same risk, same regulation’.”
stablecoins
Together, the 19 countries represent more than 80% of global GDP, 75% of international trade and two-thirds of the world’s population. They said they will remain nimble and flexible in macroeconomic policy responses and cooperation, pledging to protect macroeconomic and financial stability, and remain committed to using all possible tools to mitigate downside risks. Going forward, they claim that global stablecoins will have “top-notch” regulation and oversight.
“We welcome the FSB’s advisory report on the revision of its high-level recommendations for the regulation, supervision and enforcement of ‘global stablecoin’ arrangements.
FTX collapse
As the collapse of the FTX exchange is in the crosshairs of regulators, G20 leaders reinforced the need for coordinated cooperation to regulate cryptocurrencies worldwide. Leaders agreed to welcome international consistency in regulatory and supervisory approaches to activities and markets related to digital assets.
🇧🇷We also welcome the FSB Consultation Report on Promoting International Consistency of Regulatory and Oversight Approaches to Cryptocurrency Activities and Markets. It is critical to raise public awareness of the risks, strengthen regulatory outcomes and support a level playing field, while reaping the benefits of innovation.”
FTX domino effect
The statement comes as cryptocurrency exchanges implode under their own weight and scare investors. Thus, the G20 pushes for consistency in its regulation across jurisdictions. At the same time the statement was issued, the White House press secretary, Karine Jean-Pierre, said🇧🇷 “Without proper oversight, cryptocurrencies risk harming ordinary Americans, so this is something we see as a major issue, but the latest issues highlight and prove why prudent oversight of cryptocurrencies is really needed.”
NOW – White House: “Regulation of cryptocurrencies is needed.” pic.twitter.com/01C9VYkff4
— Disclose.tv (@disclosetv) November 10, 2022
President Joe Biden’s administration therefore called for tighter regulatory controls on Bitcoin, stablecoins and other cryptocurrencies in response to the FTX exchange scandal, led by Sam Bankman-Fried. The move comes as no surprise, as top industry leaders such as Binance CEO Changpeng Zhao (CZ) predicted that the crash of the third-largest exchange in the market would attract attention from regulators.
“Regulators will further scrutinize exchanges. Worldwide licenses will be more difficult to obtain. People now think we’re the greatest [corretora] and they will attack us more.” – said the CEO of Binance.
