Global Powerhouses At G20 Summit Shape Crypto Framework
14 September 2023
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The G20, a group representing the 20 largest global economies, is vigorously pursuing the implementation of an international framework for cryptocurrency assets.
This plan, set to kick off in 2027, aims to facilitate the exchange of information between countries, providing a transparent overview of all crypto transactions.
The initiative was first proposed by the Organization for Economic Cooperation and Development (OECD) in October 2022 to give tax authorities a clearer view of cryptocurrency transactions and their participants.
This Crypto-Asset Reporting Framework (CARF) would require countries to regularly exchange information on crypto transactions, including those carried out on unregulated exchanges and wallet providers.
The G20's endorsement, which includes nations like the United States, United Kingdom, China, and others, affects two-thirds of the world's population, making it a major step towards global crypto transparency.
In recent developments, the European Union has already updated its rules in line with the CARF.
The new guidelines require the transfer of digital assets to include the recipient's name, their digital ledger address, and account number.
This move is viewed as a step towards fostering automatic information sharing among European governments for tax purposes.
Furthermore, the G20 has backed the Financial Stability Board's recommendations for regulating crypto-assets activities, markets, and global stablecoin arrangements.
Similar to the standards applied to commercial banks, these guidelines discourage activities that obstruct participant identification, among other measures. Read more here.
Turning Global Crypto Guidelines Into Opportunities
The G20's agenda emphasizes transparency in transactions.
Although, it's not the approach we'd take—we're fans of personal freedoms like Splitchain's truth-based peer-to-peer transactions—we expected nothing less from the G20 government meetings.
What did surprise us was the underlying message from most of the major governments around the world.
They now consider cryptocurrencies of such high importance that many are coordinating on a cross-nation disclosure framework.
The European Union's move to require basic customer information such as the recipient's name, digital ledger address, and account number during digital asset transfers is something we've seen other countries do in recent years within the world of tech, crypto or finance products.
No doubt the Zucoins team will be closely following this development and improving ways to balance the best of both worlds for everyday users and regulators.
One way this could be done is for each wallet user to opt-in to provide this info, depending on the requirements of the geographic region from where they are using the wallet app.
If required, the preferred process would be to use an official government system that can immediately verify this data, instead of it passing through commercial third-party companies that will "handle your data".
Note that on-off ramps into crypto exchanges already have similar requirements, as part of KYC (Know Your Customer) rules.
Seeing the G20 get so involved could be an important factor in burying the perception of crypto as a wild-west industry and turning it into a far more accepted space in the public eye.
This process is a common path for emerging industries and can be a requirement before an industry reaches the next stage of evolution and growth.
It shows major governments around the world see cryptocurrencies as a long-term industry that is growing and needs more guardrails.
Even more so, excitingly, they consider digital assets as real assets, with similar rules looking to be applied.
No doubt other countries will follow the EU's lead in the coming years.
The key focus is to position the Splitchain network and its capabilities for long-term, useful, decentralized network activity.
It's why node scalability and smart assets are such big and important ongoing undertakings.
Not to mention, it's also one of the reasons why to us, as we often say here on MyZucoins, exchanges are a smaller priority (nothing against them), and a high-risk area of the industry.
We're focused on bigger-picture, higher-impact stuff—that's why MyZucoins was created in the first place.
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All the best,
Peter & Rob
MyZucoins
Disclaimer: Of course, this is not advice, financial or otherwise. It’s also important to consider the risks and challenges associated with any potential benefits.