In a bid to reduce the usage of cryptocurrencies in money laundering, Japan has a proposal to the representatives of the G20; to have a global crypto exchange register. This was reported by Nikkei Asian Review.
Japan is taking the lead in the push to have the 20 powerful economies in the world embrace the creation of a global crypto exchange register. Japan’s quest may be well informed considering that it already has such a register. Japan’s crypto exchange register was created two years ago in April 2017.
The register will seal loopholes
If applied by the G20, the register is aimed at fixing the loophole that money launderers have been exploited, enabling them to cover their tracks using virtual currencies. Money laundering forms part of G20’s top items to discuss when they meet next month in Fukuoka, Japan. Additionally, the central bankers and finance ministers will deliberate on customer protection in the crypto space.
Since the birth of Bitcoin and other virtual currencies, financial institutions across the globe feared being toppled over. However, financial regulators have been looking for ways to prevent illegal usage of cryptocurrencies.
Since crypto does not need a central authority to facilitate and or restrict sending/receiving, they can be used by criminals to launder money or move illicit funds. Unfortunately, some privacy-focused coins such as Monero make it even harder since transactions cannot be traced back to the send or the receiver.
In April, the FSB (Financial Stability Board), a financial monitor with a global reach, forwarded to the G20 a list of ‘regulatory and supervisory’ mandate that members within its jurisdiction should follow when addressing virtual currencies. Additionally, the FSB will next month update the G20 on how far it has gone with its task to contain crypto risks.
G20’s choice to meet in Japan is strategic
Apart from Japan having a crypto exchange registry, holding the G2o meeting seems a strategic move. For example, Japan has lost millions of US dollars to cryptocurrency exchange hacks. But, it’s response after each hack provides a lesson for the G20 to take note. Despite the hacks, Japan remains one of the largest cryptocurrency markets in the world.
Additionally, the Japanese Yen is among the three largest fiat currencies used in Bitcoin trades. The South Korean Won is also among the list. While Japan and South Korea may have a favorable view of cryptocurrencies, other Asian countries are not so optimistic.
China is out
For instance, China kicked out crypto exchanges and trading activities within its borders. Also, India is yet to make its official stand on cryptocurrency. Although India does not prohibit the operation of crypto exchanges, the country’s banks and financial firms under the watch of the Reserve Bank of India are restricted from entertaining crypto-focused firms.
Unfortunately, with some countries in the G20 bloc having already outlawed cryptocurrencies, the development of a global crypto exchange register may not mean much to them.