Over the past few years, governments around the world have begun to take an active interest in cryptocurrencies. While there are some governments which are quite liberal about their citizens being involved in cryptocurrency trade. However, there are some names which have had a strict approach to cryptocurrencies. Traditionally, it was names such as China, Algeria, Bolivia and Nepal, etc. However, more names are joining this list now.
France and Germany are now the latest names to go strict on cryptocurrencies. Officials from Germany and France are now pressuring the G20 - which is a group of finance officers from around the world. The countries state that cryptocurrencies can cause a major problem when it comes to global financial stability. They have stated that cryptocurrencies are a major risk for the investors.
Bruno Le Maire, France’s Minister of the Economy; Peter Altmaier, acting German Finance Minister; Francois Villeroy De Galhau, governor of the Bank of France; and Jens Weidmann, president of the Deutsche Bundesbank have together urged the G20 to take action against cryptocurrencies. These officials have been urging the G20 to take this issue as a priority when they meet on the 19th and 20th of March. Interestingly, the letter that has been sent to the G20 is specially copied to the Finance Minister of Argentina.
The G20 is a major financial body as it includes 19 nations from around the world, as well as the European Union as a whole. Moreover, members of the International Monetary Fund and World Bank are also a part of the G20 summits. The letter that was written by the aforementioned French and German officials talks about “significant rise and the volatility in the valuation and market capitalization over the past year of digital instruments issued through distributed ledger technology.” The officials further stated that the G20 could adopt appropriate, “international harmonized actions” recognizing the “transboundary implications” of cryptocurrencies.
The letter written to the G20 nations asks of four challenges to be taken care of:
- A clear distinction between the cryptocurrency tokens and the underlying blockchain technology
- Monitoring the expansion of the cryptocurrency markets closely.
- Protecting novice and non-professional investors who may not know the risks of cryptocurrency trading.
- Anti-money laundering and counter-terrorism approach.
By urging the G20 to take a collective action into cryptocurrencies, it isn’t just limited to France and Germany, but potentially many other nations who may be affected. In the weeks to follow, we expect France and Germany to crack down on local cryptocurrency exchanges and get stricter with those investing in cryptocurrencies when it comes to disclosure of wealth and proper taxation laws.
While France and Germany gear up to tackle cryptocurrencies, another G20 member, India is also working on a similar, though less strict path. Indian tax authorities have started sending out hundreds of thousands of tax notices to those who have been investing into cryptocurrencies via local cryptocurrency exchanges.