Speaking to Reuters in an interview in London, England on Oct. 22, Jeremy Allaire, the chief executive of the Goldman-Sachs backed cryptocurrency startup, Circle, says that the G20 must coordinate on the regulation of cryptocurrencies. So far, the world has been divided on the regulation of the emerging market and major economies have taken divergent routes towards the industry’s rules. The reasons for the different approaches to regulation are varied and range from investor protection, security breaches, price manipulation to outright authoritarian policies.

Allaire said:

“Ultimately there needs to be normalization at the G20 level of critical crypto-related regulatory matters.”

Need for an International Regulatory Standard

The Financial Action Task Force (FATF), a Paris-based international watchdog for money laundering said Oct. 19 that it was going to set up its first regulatory draft on the intersection of digital currencies and criminal activities by June. The step taken by FATF is a big step in introducing international regulatory standards in the young industry that has suffered at the hands of hackers, fraudsters, volatility, and more.

The international watchdog is also of the view that sovereign states must step in to regulate or license cryptocurrency exchanges and related organizations in order to fight the use of virtual cryptocurrency financial crimes such as money laundering and terrorism financing.

Allaire shares the same sentiments and thinks that there should be a clear distinction between tokens which are securities and those that are not. He also says there should be avenues to deal with market manipulation.

He added that:

“When it comes to token offerings, how should they be treated? Which token offerings are securities, which are not? The trading venues – are they like spot commodity markets that need to have rules in place around market manipulation?”

How Countries Differ in Regulation and Adoption

Cryptocurrencies still operate in grey areas across Europe with a few jurisdictions enacting attractive blockchain laws. Switzerland, Malta, and France have moved towards regulating the industry. The UK wants to take a similar stance, and its financial watchdog is closely watching the market.

However, the situation is different in Asia. China enacted a blanket ban on cryptocurrencies and has not changed its position. India, an emerging market with a population of more than a billion people, seems not to be in favor of cryptocurrencies. The state, however, sent a delegation to several countries to see how they regulate cryptocurrencies but even after the trip, the ban on cryptocurrencies is still in force.

Japan has adopted a positive stance on cryptocurrency, and instead of killing the industry with stringent regulation, the country wants to let the market flourish. Japanese cryptocurrency exchanges have been the target of large-scale hacks with Coincheck and Mt. Gox hacks being the best examples.

It remains to be seen when world leaders will pay attention to Allaire’s words and form an international regulatory standard for cryptocurrencies.

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