G20 finance ministers adopt new cryptoassets regulatory roadmap

The G20 Finance Ministers and Central Bank Governors (FMCBG) adopted a new regulatory roadmap for crypto assets at a meeting in Marrakech, Morocco, on October 13, 2023. The roadmap represents a step away from an outright ban, focusing instead on proactive and collaborative oversight. 

It was included in the International Monetary Fund (IMF) and Financial Stability Board (FSB) Synthesis Paper at the behest of the G20 presidency, currently chaired by India’s Prime Minister, Narendra Modi.

Managing crypto risks with action-oriented policies

The IMF-FSB paper outlines the risks of a lack of regulation in the crypto industry, which include insider trading, fraud, market manipulation, and environmental risks.

In response, it highlights a comprehensive plan for productively regulating the sector, drawing on existing guidance. Section three recommends regulatory actions to protect macroeconomic and financial stability. These include implementing Financial Action Task Force (FATF) 2019 standards for virtual asset service providers (VASPs) to protect local and global economies from money laundering, terrorist financing, and weapons proliferation. It also calls for inter-jurisdictional information-sharing to ensure consistent alignment with FATF standards.

The policy implementation roadmap, outlined in section four, seeks to facilitate countries’ collaborative implementation of the recommended measures. It includes:

• International organizations (IO) and standard-setting bodies (SSB) will implement the FSB’s recommendations. The FSB and SSBs will work together to establish a coherent, risk-based international regulatory framework. This will work in tandem with the FATF’s 2023 implementation roadmap, which also seeks to address inconsistent global regulation of crypto assets. In 2025, the FSB will review the global implementation of its recommendations and decide whether additional guidance is needed.
• Outreach beyond the G20. In particular, the IMF will conduct global outreach to encourage more consistent global regulatory standards. The FATF roadmap will also support this global effort.
• Global cooperation, information-sharing, and coordination. As part of their shared workplan, SSBs and the FSB will coordinate to help develop a consistent, cross-sectoral global response to crypto market risks.
• Addressing data gaps. The G20 FMCBG supported the new Data Gaps Initiative-3 (DGI-3), which seeks to close data gaps for understanding crypto’s impact on the economy’s financial stability.

How the roadmap impacts firms

The roadmap will directly affect crypto firms operating in the G20 member states. Firms operating in the G20 are encouraged to study the complete roadmap and stay abreast of upcoming regulatory initiatives that may heighten their obligations. However, due to the roadmap’s global initiatives, firms outside these jurisdictions should also watch for important legislative changes. 

Affected crypto firms may also want to proactively review their AML/CFT policies and ensure they respond to current risks, such as money laundering and sanctions evasion.