G20 Summit Shares Decision On New Cryptocurrency Tax Regulations
The Saudi Gazette recently reported that in early December, each G20 nation signed an acknowledgement of “necessary reform” due to the global economy’s “digitalization.” The document refers to “crypto-assets,” which may be cryptocurrencies. Therein, the G20 agreed to regulate such assets consistent with FATF standards.
According to the document,
“We will regulate crypto-assets for anti-money laundering and countering the financing of terrorism in line with FATF standards and we will consider other responses as needed.”
As Section 26 states,
“We will continue to work together to seek a consensus-based solution to address the impacts of the digitalization of the economy on the international tax system with an update in 2019 with a final report in 2020.”
The United States has been the first country to take concrete action against financing of terrorism with its report by the U.S. Treasury Office of Foreign Asset Control. The report discussed two Bitcoin wallet addresses and warned them and the financial community that those who were transacting may be subject to sanctions.
The big question that arises is whether such measure will be successful, especially in light of the fact that Bitcoin was designed to be resistant to censorship.
The country that spearheaded the initiative is India. At the summit, it presented a list of nine points that urged members of combat against “fugitive economic offenders.” India’s Prime Minister Narendra Modi presented the list and discussed that it would be necessary to have international cooperation for information shearing that would enable rapid tracking of offenders.
In agenda’s words,
“FATF should be tasked to formulate a standard definition of fugitive economic offenders. FATF should also develop a set of commonly agered and standardized procedures related to identification, extradition and judicial proceedings for dealing with fugitive economic offenders to provide guidance and assistance to G20 countries, subject to their domestic law.”
The FATF website expands on the concept,
“The Financial Action Task Force (FATF) is an inter-governmental body established in 1989 by the Minister of its Member jurisdictions. The objectives of the FATF are able to set standards and promote effective implementation of legal, regulatory and operational measures for combating money laundering, terrorist financing, and other related threats to the integrity of the international financial system. The FATF is, therefore, a ‘policy-making body’ which works to generate the necessary political will to bring about national legislative and regulatory reforms in these areas.”
One of the G20 countries, according to Bitcoinist’s reports, did not continue to establish a regulatory framework. In any event, the summit did recognize that even though there are efforts to combat the negative implications of cryptocurrencies, that there also advantages to such currencies as well. It is just necessary to remain vigilant in the process.