23rd February 2023 > > G20.

tl;dr

A G20 meeting of finance ministers that started yesterday is an opportunity to build some solid principles for crypto regulation.

Market Snap

Market Wrap

A sharp rejection at $25k has brought the leveraged children out to play. The acceleration of 10-year yields towards 4% has hurt stocks, and there is a risk of a follow-through to cryptos. On the upside, I always feel more comfortable when there is the prospect of a short squeeze higher on any positive news.

Curious Cryptos’ Commentary – BIS (Bank of International Settlements)

The BIS does not often get a good press in the CCC (see 14th January 2023 for the latest instalment of my running battle with them).

The head of BIS, Agustin Carstens (“ginormous” in the altered Roald Dahl parlance promoted by woke guardians Penguin Publishing) declared in a Bloomberg TV interview that the battle against crypto “has been won”.

That is the attitude of self-serving technocrats whose cushy jobs and even cushier pensions are at risk from the crypto revolution.

Good riddance to you.

Curious Cryptos’ Commentary – G20

Carstens is already enjoying his next jolly, with a first-class ticket to Bengaluru and five-star hotel treatment from 22nd to 25th February 2023 for the G20 meeting of finance chiefs.

For those already sitting in their seats on the plane, Carstens is the sort of chap who - when he steps aboard – gets everyone thinking “dear God, please not next to me”.

Cryptos are high on the agenda. Specifically, regulations around crypto are high on the agenda, which is a very good thing.

Host of the meeting, Indian Finance Minister Nirmala Sitharaman, told Reuters:

"We are talking with all nations, if we can make some standard operating procedure which is followed by everyone to make a regulatory framework, and if it can be effective.”

A standardisation of regulatory principles would be positive, but her desire for standardisation of rules is misplaced, and unachievable in any case. I fear that if the discussion goes down the latter path, no progress will be made, and another opportunity to set a framework that allows targeted and appropriate regulation will be lost.

In any case, the EU will rightly expect its flagship legislation MiCA (Markets in Crypto-Assets) to be seen as the gold standard. I see no appetite for the EU to re-open that debate and diverge from its current path.

The US has come close to passing bi-partisan legislation and will attempt to do so again. It is inconceivable that the US will follow the lead of other countries like India that have openly mulled over the idea of “banning” cryptos, which I suspect is the aim of agreeing a “standard operating procedure”.

The UK has begun its own process of consultation, and the City has always been a leader, not a follower.

It will be interesting to see what comes out of this meeting, but my hopes are not high for any meaningful progress.