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Germany and France Push for Bitcoin Regulation at G20 March ...
Bitcoin

Germany and France Push for Bitcoin Regulation at G20 March Summit

As reported by Reuters, senior German and French officials wrote a letter to the Argentinian Finance Minister requesting that the wider impact of cryptocurrencies and the need for “trans-boundary” action to regulate them be put on the agenda for the G20 summit in March. Argentina currently holds the rotating G20 presidency.

Penned by the finance ministers of France, Bruno Le Maire, and Germany, Peter Altmaier, and the central bank governors of France, Francois Villeroy de Galhau, and Germany, Jens Weidmann the letter states:

“We believe there may be new opportunities arising from the tokens and the technologies behind them. However, tokens could pose substantial risks for investors and can be vulnerable to financial crime without appropriate measures. In the longer run, potential risks in the field of financial stability may emerge as well.”

The letter calls for an international report and an IMF report on the impact of cryptocurrencies on financial stability, and for efforts to initiate a “trans-boundary” regulatory movement for digital currencies.

According to an article in the Financial Times, the letter also states:

“Great efforts have been made in recent years to protect retail investors and consumers more generally, and there is no reason that appropriate frameworks should not be applicable in this [cryptocurrency] sector … The buildup of individual exposures to such volatile tokens could have damaging consequences for misinformed investors who do not understand the risks.”

Regulatory pressure on cryptocurrencies is on the rise, with China having adopted notoriously hardline stances, while regulators worldwide struggle to come to terms with the cryptocurrency phenomenon. Australian, Japan and more recently South Korea, have all created regulatory frameworks for crypto and this has actually led to impressive growth and innovation in particular in Japan where many exchanges have flourished and retail adoption is rapidly increasing.

France has previously raised concerns about the unregulated nature of the crypto market. Last month, le Maire announced the creation of a task force, led by former Banque de France deputy governor Jean Pierre Landau. The task force will be responsible for proposing guidelines for digital currency regulation and the prevention of their usage in criminal activities.

In addition, both France and Germany are currently preparing a joint Franco-German proposal for crypto regulation, which they plan to present at the upcoming G20 summit.

Overall regulation and legal frameworks should led to greater investor confidence and growth in the crypto ecosystem, although there is no doubt that the lead up to regulation will present the opportunity for FUD as some buyers seek to drive the price down in order to accumulate more bitcoin at the lowest possible price.

coinmag

Writer, Bitcoin investor

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