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Representatives of France and Germany have requested talks on policy and monetary implications of cryptocurrencies be part of the agenda for the international meeting.

The officials put forward their request in a letter to the finance minister of Argentina, who currently hold the G20 presidency, last month.

In their letter, the finance minister and Central Bank Governors of France and Germany said: “We believe there may be new opportunities arising from the tokens and the technologies behind them.

“However, tokens could pose substantial risks for investors and can be vulnerable to financial crime without appropriate measures.

“In the longer run, potential risks in the field of financial stability may emerge as well.”

Bitcoin and its cousin currencies saw their values plummet in January after South Korea, the capital of digital currencies, enforced regulation on the money.

The discussions on regulation at the G20 could see cryptocurrencies suffer from another massive drop in value.

Bitcoin saw its value drop from a record high of $19,000 in December 2017 to less than $7,000 in January this year.

South Korea introduced a ban on anonymous trading was implemented by the Asian power in a bid to crack down on all possible criminal activities the secret nature of trading Bitcoin allowed.

Central banks may also use the G20 to discuss the possibility of issuing their own digital currencies that would rival money such as Bitcoin and Ripple.

The Bank for International Settlements, which is a financial organisation owned by 60 central banks, earlier this week released a report looking into the prospect of opening their own online money.

The introduction of digital currencies backed by central banks could see the value of other cryptocurrencies put at risk due to increased competition.

The report, which is likely to be discussed at the international event, indicates that with more work they could help shape the future of money.

It said: “Wholesale Central Bank Digital Currencies (CBDC) might be useful for payments but more work is needed to assess the full potential.

“Although a CBDC would not alter the basic mechanics of monetary policy implementation, its transmission could be affected.”

Cryptocurrencies are extremely volatile and are susceptible to extreme spikes and troughs in short periods of time.

(Excerpt) Read more Here | 2018-03-14 03:23:18


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