G20 Finance Ministers' Summit: Reiterating Regulation and Review of Global Stablecoin

Today's G20 summit was held in Riyadh. At the G20 Finance Ministers' Meeting, the finance ministers of various countries showed close attention to cryptocurrencies and virtual assets. After the meeting, a group of finance ministers and central bank governors issued a joint communiqué. Jointly urge countries to implement cryptocurrencies and other virtual assets.

Supervision and review of digital currencies continue

In the announcement, they emphasized that the statement on the so-called 'global stablecoin' and other similar arrangements was reiterated in October 2019, arguing that such risks need to be assessed and properly addressed before they can begin operations. This shows that the G20 countries still have doubts about the launch of global stablecoins and believe that they may become one of the means of transnational crime, which may pose a certain threat to the launch and issuance of global stablecoins such as Libra.

G20 finance ministers and central bank officials emphasized previous arguments about virtual property and virtual currencies, and the G20 finance ministers also reiterated their support for the Anti-Money Laundering Financial Action Task Force (FATF), who believed that virtual property and virtual currencies must be To support the FATF standard.

The Financial Action Task Force (FATF) was established in 1989 and is an intergovernmental organization initiated by ministers of member states (regions). The main task of FAT F is to formulate international standards and promote the effective implementation of relevant legal, regulatory and administrative measures to combat activities that endanger the integrity of the international financial system, such as money laundering, terrorist financing, and proliferation financing. The FATF also works closely with other international stakeholders to identify weaknesses at the national level and protect the international financial system from abuse.

The so-called FATF standard is an international standard for international anti-money laundering and financing formulated by the Financial Action Task Force (FATF).

The finance ministers of various countries stressed that the prerequisite for countries to support the issuance of global stablecoins must be that they can accept the financial and technical review of each country. But in the face of the growing market for cryptocurrencies and virtual assets, and the emergence of global stablecoins like Libra, countries have to speed up this discussion process to deal with this situation.

At the same time, according to Bitcoin.com, before the G20 meeting, Randal K. Quarles, chairman of the Financial Stability Board (FSB), sent a letter to the G20 finance minister and central bank governor.

The letter mentioned that the global financial system has been facing new challenges, and technology is changing the nature of traditional finance. The non-bank sector has grown and requires deeper understanding and coordination among regulators. The FSB is determined to accelerate the development of the necessary regulatory and oversight measures for these new tools, and will release a draft report on regulatory issues and possible countermeasures in April for public comment

In fact, according to relevant research and reports of 52CBDC, this communique is likely to be just the beginning. Following the 2020 annual World Economic Forum in Davos, discussions and concerns about global stablecoins and digital currencies will continue. Increase. With the maturity of blockchain technology, the importance of cryptocurrencies has been increasingly recognized, and governments and organizations around the world have to recognize this situation and study it.

DCEP and Libra threats

The real reason for cooperating research and legislation in various countries may still be the release of China's central bank digital currency and Facebook's Libra coin plan.

These two are one of the most influential countries in the world, and one is an Internet company with 2.6 billion users in the world. Once China successfully issues its digital currency DCEP, along with DCEP's technical advantages and first-mover advantages, it will further promote the internationalization of the renminbi, and it will inevitably make many countries follow suit, affecting the dollar-based currency system.

In fact, at present, Sweden, the United Kingdom, Canada, the European Union, France and other countries are also accelerating their central bank digital currency plans. The United States is also paying close attention to this plan. In 2019, before February 21, the Commodity Futures Trading Commission (CFTC) The chairman said in an interview that the Federal Reserve needs to issue a digital currency to keep pace with the Chinese government.

The central bank's digital currency can take many forms, but in principle, the physical currency will be replaced by a blockchain-connected digital unit placed in a mobile wallet. When directly using digital currency for transactions, merchants must access the central bank's blockchain. Giancarlo added that with the popularity of online shopping, the United States should offer some electronic payment options instead of debit or credit cards.

In addition to sovereign states, Facebook ’s Libra plan is also one of the reasons why countries consider it. Since its launch, Libra has been controversial. Zuckerberg has also been asked by the US Congress several times about Libra. The launch of Google will inevitably accelerate the popularization and use of cryptocurrencies.

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