Crypto regulations

Crypto Regulations Will Soon Hit Germany and France after the G20 Summit

Crypto Regulations Will Soon Hit Germany and France after the G20 Summit

Crypto Regulations Coming to Germany and France

Germany and France have announced plans to begin regulating their cryptocurrency markets. Both countries intend to voice their support for crypto regulation during the upcoming G20 Summit in Argentina. Mark Wilson, Group CEO at the Aviva insurance firm, believes that an inevitable  “blizzard” of crypto regulations will strike in the next few weeks. He further states that cryptocurrencies present a threat to the sovereignty of nations, their Treasury, and overall safety of consumers.

European Leaders Concerned About Cryptocurrencies

Bruno Le Maire, France’s finance minister, has put together a working group, along with what he calls a “digital currencies mission”, in order to regulate the nation’s cryptocurrency market. He also plans to announce his regulation proposals alongside Germany at the G20 summit. Mr. Bruno and even the European Union feel that cryptocurrencies could be used for illegal purposes such as money laundering, tax evasion, and aiding terrorist activities.

Other reasons for crypto regulations include addressing the high risk in crypto-market speculation and manipulation. Joachim Wuermeling, a board member of the German Bundesbank, thinks that regulations applicable only to a particular country, or geographic location, will not be effective. Mr. Wuermeling explains that “the regulatory power of nation-states is obviously limited”. Therefore, he suggests that an international regulatory framework should be developed to carefully monitor cryptocurrencies. Practically speaking, this idea might sound good in theory but it could become too difficult to implement due to differences in financial policies from one country to another.

Crypto Regulation Might Help Investors

Peter Altmaier, Germany’s finance minister, has stated that “We have a responsibility towards our citizens to explain and reduce the risks” (referring to cryptocurrencies). David Drake, chairman at LDJ Capital, a large equity company, feels that regulations on cryptocurrencies might encourage investors to pour more money into the crypto-market. Most people who invest their money prefer some level of assurance, which regulations could provide. They even have the potential to cut down on “malpractice” at crypto-exchanges. For example, Core Media recently reported that market manipulation carried out by a couple of trading bots might have caused bitcoin’s price to surge from just $150 to around $1000. If new regulations could prevent something like this from happening in the future, then that would probably be a good thing for the crypto-market.

Highly Influential with Very Large Economies

Germany’s GDP is well over $3 trillion while France’s GDP is more than $2 trillion. According to Investopedia, both countries are part of the world’s top 10 economies. Clearly, both nations also rank high among the world’s countries in terms of global influence. Therefore, decisions made by the regulatory authorities of these countries regarding cryptocurrencies and their market will most likely affect how regulators in other countries respond.