G20 Riyadh 2020: Test global stablecoins extensively before launch

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Crypto took the limelight at the G20 Riyadh 2020. The Finance ministers and governors of central banks of the ‘Group of 20’ have once again reiterated the need to implement the Financial Action Task Force (FATF) guidelines on cryptocurrencies.

Members concluded that it was in the interest of the countries to comply with FATF regulations to put a full stop to money laundering and terror financing modules.

The official statement of G20 Riyadh 2020 further mentions that ‘global stablecoins’ must undergo rigorous testing before their launch to evaluate the associated risks.

The concerns must be addressed suitably so as not to cause undue stress on the global financial system.

G20 Riyadh 2020: Members for FATF against money laundering

On the one hand, the leaders discussed virtual currencies while on the other, they reemphasized the importance of FATF guidelines. The rise in the use of virtual asset class was recognized by the attendees, but the fight against money laundering and terror financing must always take precedence.

They reaffirmed that FATF must set new standards and evolve to combat terrorist financing, illicit financial flows, and global money-laundering operations.

The document states that the group is awaiting the consultation report from the Financial Stability Board (FSB) that discusses the regulatory issues related to ‘global stablecoins.’

They also discussed the upcoming IMF macroeconomic implications report. Recently, the FSB chair, Randal K. Quarles, penned a letter to the G20 finance ministers outlining a stablecoin development roadmap along with cross-border payment solutions. These developments show that governments across the world are acknowledging the growing aura of virtual assets and seek to regulate them appropriately.

G20 Riyadh 2020 and Davos 2020 point in the same direction

The G20 Riyadh 2020 communique and the World Economic Forum (WEF) both paint a similar picture. They both acknowledge the upcoming tide of stablecoins, cryptocurrencies, and virtual assets. Such a stand by prominent world organizations marks an important milestone in the crypto journey. The global reputation and recognition of cryptocurrencies are rising every day.

The launch of Facebook Libra and China’s digital Yuan has unnerved various governments. Regulatory authorities are working to face such challenges while at the same time developing their own central bank digital currencies. The G20 recognizes such developments and thus reiterates its stand of extensively testing global stablecoins before launch.

Featured Image by Pixabay

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