World leaders to discuss cryptocurrency crackdown at this week's G20 summit

 
Courtney Goldsmith
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Bitcoin is on the docket for the G20 meeting in Buenos Aires this week (Source: Getty)

Finance ministers and central bankers from around the world will discuss new regulations for cryptocurrencies at this week's G20 summit in Buenos Aires.

The discussion comes amid concerns that digital currencies are fuelling money laundering and other criminal activity.

Thomas Hulme, a solicitor at London law firm Mackrell Turner Garrett, said that policymakers are likely to focus their discussions on anti-money laundering and consumer protection issues.

These could include regulatory measures such as the UK Financial Conduct Authority's (FCA) decision last week to issue a licence to US crypto exchange Coinbase.

Coinbase's e-money licence from the FCA was an endorsement that its business meets certain anti-money laundering and processing standards.

"In the last month, there have been several examples of government and regulatory actions towards cryptocurrencies. This shows acknowledgement that cryptocurrencies and blockchain have a potential to be used in a positive and productive way but also that the illegal activity within cryptocurrencies needs to be addressed," Hulme said.

Michael Harris, director of financial crime compliance at Lexis Nexis Risk Solutions, added that the regulation of cryptocurrencies will present many challenges, and there will "likely be jurisdictional differences within the G20 countries' regulations, and those outside of the G20 too".

“No single entity has tried to define regulation of this purely digital ecosystem, and it is unclear how this will be undertaken," Harris said.

"Governments will be looking for a way to align regulation as much as possible. Unless there is uniformity of regulation on a global basis, even at a high level, businesses will struggle to manage the continuing financial crime risk coming from customers’ cryptocurrency investments."

Last week, bitcoin tumbled below $8,000 (£5,700) after Google announced it would crack down on cryptocurrency and initial coin offering (ICO) advertisements, following a move by Facebook in January to do the same.

The digital currency's price was down 5.75 per cent at $7,409.83 at the time of writing.

Read more: Cashing in on crypto: The world's most bitcoin-friendly cities

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