American, French,German and China finance officials call for Global Crackdown On non mineable Cryptocurrency copies of Bitcoin and ICOs.

Global Crackdown On Cryptocurrency non mineable copies of Bitcoin and ICOs.

Global Crackdown On Cryptocurrency, non mineable copies of Bitcoin and ICOs.

German and French finance officials want the G20, an international group of financial officials, to take action to prevent cryptocurrencies from undermining global financial stability and creating risks for investors, according to a recent letter to G20 members.

The officials – Bruno Le Maire, France’s Minister of the Economy; Peter Altmaier, acting German Finance Minister; Francois Villeroy De Galhau, governor of the Bank of France; and Jens Weidmann, president of the Deutsche Bundesbank – are urging the G20 ministers to take action to prevent risks posed by the rapid growth of cryptocurrencies.

The officials said they want the matter discussed at the first G20 discussion during its Finance Ministers and Central Bank Governor’s meeting in Buenos Aires March 19 and 20. Their letter was specifically copied for Argentina’s minister of finance, Nicolas Dujovne.

G20 is an informal group of 19 countries and the European Union, and includes representatives of the International Monetary Fund and the World Bank, according to the G20 Information Centre.

Crypto’s Rise Brings Alarm

The letter noted the “significant rise and the volatility in the valuation and market capitalization over the past year of digital instruments issued through distributed ledger technology.”

The officials said the G20 could adopt appropriate, “international harmonized actions” recognizing the “transboundary implications” of cryptocurrencies. They acknowledged cryptocurrencies present a fast evolving tool, but at the same time pose risks for investors and can be vulnerable to financial crimes.

Four Challenges

The letter cited four challenges:

1) Understanding the nature of crypto tokens. The officials said such tokens are mislabeled as “currencies,” and that regulators hold disparate views about the nature of such tokens that result in a “lack of clarity for investors” that will cause speculation.

They called for a clear distinction between the tokens and the underlying distributed ledger technology that promises “sustainable innovation” that Germany and France are pursuing.

2) Monitoring the rising exposures of market participants to tokens in terms of market integrity and financial stability. Such implications appear to be limited at present, but considering the expanding capitalization of tokens and the new financial instruments, such developments must be closely monitored to prevent risks to financial stability. While there are no implications in monetary policy, the use of such tokens as a means of exchange should be monitored in the field of monetary policy. The intention by some central banks to issue cryptocurrencies must also be extensively monitored.

3) Protecting non-professional investors. Better information is needed for investors who do not understand the risks they are exposing themselves to.

4) A common approach is needed for anti-money laundering and counterterrorism financing. Cryptocurrencies have the potential for those who can make the worst use of them. Germany and France have taken regulatory measures in the field of anti-money laundering and counter-terrorism financing, and the European Union is following suit. But a coordinated global effort is needed.

International Action Called For

The officials want the international forums that respond to the G20, such as FSB, FATF, BIS, to conduct a report on the four challenges raised by the G20 Finance Ministerial in July and propose possible guidelines for additional action.

G20 should also consider asking the IMF to conduct a quantitative analysis of international financial stability issues related to crypto assets, the letter noted.

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