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What Will Happen to Cryptocurrencies After the G20 Summit
09 August 2019 12:31, UTC
By Massimo Di Giuda
The summit in Japanese Osaka resulted in a declaration signed by the participating countries. A separate 17th chapter is devoted to cryptocurrencies. However, this part of the declaration does not contain any specifics.
Its main points:
blockchain technology is useful and profitable;
cryptocurrencies do not threaten financial institutions;
it is proposed to control cryptocurrencies further.
G20 participants supported the FATF regulatory measures that were introduced a week before the summit. Their essence lies in linking wallets and transactions to the person and complete deanonymization. Exchanges should own and disclose the following data upon requests from regulators:
the surname of the sender and the details of his digital wallet;
recipient's full name and his digital wallet data;
the sender’s street address and his passport data.
All the recommendations were given by analogy with traditional exchanges. It can be argued with a high degree of probability that it's not completely clear how to implement them at the moment. Therefore, even many of those countries that have approved the amendments will not be able to adapt quickly. Nevertheless, some participants have already accepted and tightened the requirements for cryptocurrency exchanges. We will speak about the consequences of such decisions by the end of the article.
The official reason for all these restrictions is, of course, the fight against money laundering and the financing of terrorism. However, many experts have some complaints about this formulation. For example, weapons in terror-ridden Africa are supplied by quite developed countries for fiat currency, thereby moving their economies forward — though there are no plans to deal with dollars at the official level. Therefore, many disagree with the FATF wording. Obviously, there are no plans to disclose real reasons, but the desire to control cryptocurrency is becoming stronger year by year.
Before the release of these recommendations on cryptocurrencies, some analysts tried to convince FATF that methods from the fiat world could not be applied to the crypto industry without amendments. As long as these spheres have a different technological basis, the same methods for banks and crypto exchanges simply will not work. While the FATF and officials are fighting windmills, 39 kg of cocaine were found on the plane that accompanied the Brazilian president to the Osaka G20 summit. And most likely these drugs weren’t bought in darknet for bitcoins.
It is hard to say how much these tough measures will harm cryptocurrency users. Probably a significant part of the infrastructure will eventually go into the shadows. The fact that cryptocurrencies are being discussed among the leaders of countries for the umpteenth time means that they will be integrated into the economy, and this is inevitable. The US are trying to gain control, saying at the same time that bitcoin and tokens are worthless, and equating them to candy wrappers. Such a two-faced position does not inspire confidence in the crypto community. As a result, there is a growing interest in anonymous cryptocurrencies, such as Monero and its analogs, whose transactions and owners are impossible or extremely difficult to track.
Possession of bitcoins may result in an unexpected knock at your door at some point. As it was at the end of the Great Depression in the USA, when gold was forcibly bought. The trend set by the FATF and supported by different countries hints that something similar is possible with cryptocurrencies soon. Some countries already restrict or completely prohibit cryptocurrency trading, and mining is considered a crime there.
The main recommendation to save your assets is to empty accounts on the exchanges and transfer the cryptocurrency to cold storage. Hardware wallets allow you to store more than a thousand different tokens, so just buy one. This simple but effective way will eliminate several risks at once, for example, the risk of exchange bankruptcy, hacking, or regulatory risks.
All in all, there are several potentially positive developments for the crypto industry. FATF recommendations are just recommendations. Every country may comply with them, may not comply with any, or accept them partially. It also may not comply, but develop the same rules within the country. The more the state considers itself self-sufficient and autonomous from the rest of the world, the less likely it allows some international organization to decide which standards should the country adhere to and which not. But there is a downside. FATF recommendations will work better if they are accepted by all countries in the world.
As history shows, when governments combat evil, most often, the poorest and most gullible people are those who suffer. You need to monitor your assets closely, keep them in cold wallets. Exchanges are already having a hard time, and looks like his is only the beginning.
Image courtesy of The Cryptoreport
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