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One of the key items for tabled at the upcoming G20 Summit in June is the regulation of cryptocurrencies and crypto trading. The Financial Action Task Force (FATF) will meet spokespersons from several countries as they focus on establishing new levels of criteria for crypto trading and crypto businesses.
This summit will not only bring together those in crypt businesses but also national blockchain groups and the market leaders Virtual Asset Service Providers (VASP). Regulators see this summit as a positive step towards regulating the industry. FATF has raised the bar in setting the standards for blockchain and cryptocurrency. Related to this is a topic tabled by Japanese Congressman, Naokazu Takemoto, is the effect that these new standards will have on established economic matters.
Takemoto went to accept that those in the VASP world, are very clear on the significance of comprehensible rules that have to be set to allay any fears of financial irregularities and in reducing fraud.
Japan addresses cryptocurrencies
The meeting which is set to address the regulatory issues will take place at the same time as the G20 Summit and will take place in Osaka, Japan on 28 and 29 June. Japan stands alone in having a legitimate structure for cryptocurrencies.
Those setting the standards for regulations in Japan have included limitations on risky trading and also the requirement for all exchanges to have a custodial fund for the respective cryptocurrency.
What is the effect of increased regulations?
All parties have reached a consensus that the cryptocurrency world has to operate according to set rules, but there are concerns about what the outcome of excessive regulation could be.
Former Secretary of the Australian Department of the Attorney General and ex-president of FATF, Roger Wilkins, has reservations that if too many rules are introduced, the general public will be forced out of these controlled platforms. The resulting action would be to look for other options which are not as regulated. These alternatives are could give rise to the view that online trading is linked to criminal activities.
Wilkins went on to say that despite the call for a regulated industry, there could be a negative effect on the cryptocurrency world. The controls could result in crypto deals will move away from regulated platforms, the latter being the foremost way of detecting financial malpractices.
International interest at the event
China, South Korea, United Kingdom, Singapore, and Australia will all have a presence at the event. Members of the respective Blockchain Associations from these countries will evaluate the new measures. The blockchain industry will be informed before the meeting whether or not it will face difficulties when dealing with international structures.
The regulations set by FATF will be rigid, and there will be no room for a breach of these rules. However, regulators accept that there also needs to be equilibrium to allow for transformation. Wilkins stated clearly that the proposed regulations of the FATF need to evenly weighted to allow for the growth of the industry.