Bitcoin mania puts cryptos in sight of world finance chiefs

This time last year, finance chiefs from the world’s biggest economies were barely thinking about the niche industry of bitcoin when they met in Germany. Now, they’re loudly warning cryptos could destabilise financial markets.

US Treasury Secretary Steven Mnuchin and his counterparts gathered in Buenos Aires were fretting about the rapid rise of crypto assets at their first Group of 20 meeting of the year.

“We dedicated a lot of time to cryptocurrencies,” Argentine central bank President Federico Sturzenegger told reporters after the meeting. “We were asked to have concrete recommendations regarding cryptocurrencies by July.”

Cryptos rocketed up the G20 agenda, after one of the wildest investment manias in history that’s led policy makers to worry about tax evasion, money laundering, terrorism, consumer protection and more. The industry could have financial stability implications at some point, they said in their final communique.

Japan’s Vice Finance Minister Minoru Kihara said discussions centred on the functionality of cryptos. “For example, can people make settlements using them, or do people use them in terms of the value of their assets?”

Bitcoin investors were expecting ministers to call for new rules on Tuesday even though it was the first time the group talked about the issue. Financial regulations usually take months, if not years, to be agreed. The digital currency jumped as much as 5.5 per cent to US$8,889 on the back of the news, after trading between US$8,400 and US$8,600 for the past day.