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Finance ministers and central bank governors from the G20 countries have gathered this weekend for a two-day meeting ahead of the G20 summit, and cryptocurrency is among the topics of discussion. Global standard-setting bodies have submitted their policies and provided tools to help the member countries with the regulation of crypto assets in their own jurisdictions.
Crypto Discussions at G20 Meeting
World leaders will gather in Osaka as Japan hosts its first ever G20 summit on June 28 and 29. Ahead of the summit is a G20 Finance Ministers and Central Bank Governors Meeting which is taking place on June 8 and 9 in the Japanese city of Fukuoka. Besides the G20 countries, there are invited guest countries and international organizations that will be participating including the United Nations, the International Monetary Fund, the World Bank, and the World Trade Organization. Cryptocurrency, regulations, and how users should be protected in the new financial system are being discussed at the conference this weekend, according to local media.
Christine Lagarde, Managing Director of the International Monetary Fund (IMF), mentioned crypto assets in her speech at the meeting on Saturday afternoon. She believes that “harmonization of different approaches from country to country, such as dealing with crypto assets and non-bank financial intermediaries, is important, but it also needs to aim for financial stability and consumer protection,” Nikkei conveyed. The IMF chief was further quoted as saying:
It is important to continue international dialogue, but it is not as easy as it looks.
At the G20 High-Level Seminar on Financial Innovation Saturday afternoon, Blockstream CEO Adam Back explained the differences between crypto assets, blockchains and the current financial infrastructure, local media reported. After talking about secure tokenization and using blockchain for remittances, he noted the importance of fiat currencies being issued on a blockchain and explained his aim to provide OTC traders and institutional investors with a way to swap stablecoins and bitcoins linked to the Japanese yen. A potential scenario, according to him, is where the public can purchase and store a digitalized version of the yen in a hardware wallet that is managed offline without being exposed to online attacks.
Outlining the G20 role and priorities under the Japanese presidency, Japan’s Finance Minister Taro Aso remarked, “We will also take steps to harness the potential benefits of technological innovation, such as distributed ledger technology, while mitigating its risks, including those posed by crypto-assets.”
Global Crypto Regulatory Standards
A number of global organizations have been working on regulatory standards for crypto assets which the G20 countries can apply in their own jurisdictions. They include the Basel Committee on Banking Supervision (BCBS), the Committee for Payments and Market Infrastructures (CPMI), the International Organization of Securities Commissions (IOSCO), the Financial Action Task Force (FATF), the Organisation for Economic Co-operation and Development (OECD) and the Financial Stability Board (FSB). Each covers different aspects of crypto asset risks within their respective mandates. The FSB elaborated:
Standard-setting bodies and other international organisations are working on a number of fronts, directly addressing issues arising from crypto-assets. They are mainly focused on investor protection, market integrity, anti-money laundering, bank exposures and financial stability monitoring.
The FSB is an international body that monitors and makes recommendations about the global financial system. It has submitted several crypto-related reports to the G20 Finance Ministers and Central Bank Governors Meeting. The most recent one, entitled “Decentralised financial technologies,” was published on June 6. It follows another which details standard-setting organizations’ regulatory approaches and work underway on crypto assets. The board has also submitted a report which lists all member countries’ crypto asset regulators to help them collaborate on regulations.
Crypto Exchange Registry
Among crypto-related topics to be discussed, finance ministers and central bankers from the G20 countries are expected to reach an agreement on creating a registry of crypto exchanges in an effort “to prevent virtual money laundering,” Nikkei Asian Review reported.
Japan is expected to lead the discussion, drawing from its own experience of requiring all crypto exchange operators in the country to register with its top financial regulator, the Financial Services Agency. So far, 19 exchange operators have successfully registered. They have to comply with strict rules imposed after one of the largest crypto exchanges in the country, Coincheck, was hacked in January last year. In September, a registered exchange, Zaif, was also hacked.
The tightened regulation has discouraged a number of operators from registering; some voluntarily withdrew their applications while others were rejected by the agency. Nonetheless, the regulator revealed to news.Bitcoin.com in March that over 140 more businesses had expressed interest in registration.
The FSB continually assesses financial stability risks from crypto assets and reports to the G20. In March last year, the board reported that crypto assets did not pose material risks to global financial stability. In its report entitled “Crypto-assets: Work underway, regulatory approaches and potential gaps,” the board reaffirmed:
To date, the FSB continues to assess that crypto-assets do not pose material risks to global financial stability at present, but that they do raise a number of further policy issues beyond financial stability.
The European Central Bank shares the sentiment. In its May report, the bank stated that “At present, crypto-assets’ implications for and/or risks to the financial stability of the euro area, monetary policy, and payments and market infrastructures are limited or manageable.”
Another FSB report will be released in September which will include developments in stablecoins and tokenization. According to the FSB, the OECD is also “currently undertaking analytical work on tokenisation of assets and the impact a possible proliferation of such a mechanism would have on the financial markets, as well as around the benefits and risks of stablecoins.”
Guidance on Virtual Currencies
The G20 countries have already reaffirmed their support for the FATF as the global standard-setting body in areas of combating money laundering and other related threats to the integrity of the international financial system. They have also agreed to follow the FATF recommendations including those concerning crypto assets.
The FATF has promised to release its new “Guidance on Virtual Currencies” this month. A number of countries such as Japan, Russia and South Korea, have already begun complying with the crypto standards created by the FATF, as news.Bitcoin.com reported.
Different Regulatory Approaches and Gaps
The FSB explains that regulatory gaps may arise when crypto assets are “outside the perimeter of market regulators and payment system oversight” and “from the absence of international standards or recommendations.” Noting as examples “issues around crypto-asset wallets as specific vehicles for storing crypto assets,” the board asserted that “The rapid technological evolution of crypto-asset markets may also influence regulatory approaches and give rise to regulatory gaps or areas that require more regulatory focus,” adding:
A forward-looking approach in monitoring crypto assets can help provide a basis for identifying potential gaps and areas that should be prioritised or focused on.
The board, therefore, “recommends that the G20 keep the topic of regulatory approaches and potential gaps, including the question of whether more coordination is needed, under review.”
Banks Engaging in Crypto Activities
The BCBS is assessing and responding to the risk crypto assets pose to the banking system. It has been monitoring crypto-related developments and is “developing high-level supervisory expectations for banks engaging in crypto-asset activities.” Currently, the Basel framework does not explicitly apply to banks with exposures to crypto assets but “it does set out minimum requirements for the capital and liquidity treatment of ‘other assets,’” the FSB clarifies:
The committee is now considering whether to formally clarify the prudential treatment of crypto-assets across the set of risk categories.
Central Bank Digital Currencies
A study on central bank digital currencies (CBDCs) has been conducted by the CPMI whose work on crypto assets focuses on innovations in payments, clearing and settlement, and their impact on the current standards for financial market infrastructures.
While most central banks are interested, the study has found that they “appear to have identified the challenges of launching a CBDC, but are not yet convinced that the benefits (mainly of enhanced payments safety and efficiency) will outweigh the costs,” the FSB details:
The CPMI’s future work includes advising central banks to proceed with caution on CBDCs.
The committee will also continue to monitor “CBDCs and private digital tokens used for payments,” exchange information and analysis with regulators and global policymakers, as well as explore “potential legal issues relating to digital currencies.”
Investment Funds and Crypto Trading Platforms
The regulation of crypto trading platforms and investment funds with exposures to crypto assets are currently the focus of the IOSCO, the global standard setter for securities market regulation. A final report by the commission is expected by the end of the year. The FSB described:
IOSCO’s policy committee addressing enforcement issues has also created a portal through which its members can access and share information on enforcement and other issues relevant to crypto-assets and other digital threats.
The organization has also been focusing on initial coin offerings (ICOs). Having established an ICO Consultation Network for members to discuss their experiences and concerns, it will also develop an ICO Support Framework to assist members in dealing with the regulatory risks from token sales in their jurisdictions. Last week, the organization published a consultation paper entitled “Issues, risks and regulatory considerations relating to crypto-asset trading platforms” and has requested feedback on key considerations by July 29.
What do you think of the G20’s progress in regulating crypto assets? Let us know in the comments section below.
Images courtesy of Shutterstock, Bloomberg, and the Japanese government.
The post G20 Starts Crypto Discussions – A Look at Global Standards appeared first on Bitcoin News.
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The largest Swiss online retailer, Digitec Galaxus, has started accepting crypto payments at its two stores. Customers can choose from 10 cryptocurrencies to pay with including BTC, BCH, BNB, ETH, TRX, OMG, and XRP. One of the stores specializes in consumer electronics while the other focuses on everyday needs.
Digitec Galaxus Accepts Crypto Payments
Digitec Galaxus AG announced Tuesday that customers can now pay for their purchases with cryptocurrencies at its two online shops: digitec and Galaxus. Ten cryptocurrencies are supported — BTC, BCH, BSV, BNB, ETH, LTC, NEO, OMG, TRX, and XRP.
Claudio Schaad, leader of Team Spectre, one of the teams that make up the engineering department at Digitec Galaxus AG, discussed the new payment option in a blog post on his company’s website. “We’ve been looking into cryptocurrencies for a while now,” he revealed. The post explains that “instead of creating an own wallet or even cryptocurrency, digicon or the such, Spectre chose [to] work with a company called Coinify,” adding:
In simpler terms: while shopping, if your purchase price exceeds 200 francs, you have the option to pay with cryptocurrencies. What arrives on digitec’s end are Swiss francs.
Digitec specializes in IT, consumer electronics and telecommunications goods while Galaxus claims to be the largest online department store in Switzerland with a growing range of products for everyday needs. The two stores form Digitec Galaxus AG, its website describes.
According to Oliver Herren, co-founder and CIO of Digitec Galaxus, the company currently has around 2.7 million items for sale, from shoehorns to wheat beer to gaming PCs. He was quoted as saying:
Cryptocurrencies are fascinating and could become a relevant means of payment in e-commerce — we want to support this development.
Paying With Cryptocurrencies
A blog post on Galaxus’ website details that “The new payment option was created as part of a pilot project together with the Swiss e-payment specialist Datatrans AG,” which works with Danish crypto payment provider Coinify.
Customers shopping on digitec or Galaxus can choose to pay with cryptocurrency at checkout. They will be redirected to a page on Coinify which displays the amount due in BTC with a QR code. Customers can choose among the 10 supported cryptocurrencies and complete the checkout process. Prices are locked in for 15 minutes.
When choosing a cryptocurrency other than BTC, customers are asked to provide an address so that funds can be returned should an error occur. Furthermore, the company warns of a processing delay when paying with other coins.
The blog post further notes that “Normally, the payment confirmation by Coinify takes place within a few minutes,” adding:
Digitec Galaxus does not charge any fees for cryptocurrency payments. Coinify charges a conversion fee of 1.5% of the purchase amount. Other, but small, transaction fees will be charged depending on the currency, as well as how fast the transaction is to be confirmed.
What do you think of Digitec Galaxus accepting 10 cryptocurrencies? Let us know in the comments section below.
Images courtesy of Shutterstock, Coinify, and Digitec Galaxus AG.
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The post Switzerland’s Largest Online Retailer Starts Accepting 10 Cryptocurrencies appeared first on Bitcoin News.