Creating a Global Standard for Regulatory Encryption: The G20 Consensus

According to reports, Indian Finance Minister Nirmala Sitharaman stated at an interactive meeting in Karnataka, India that today’s G20 consensus is that a global standard may have to be created. We must all work together to achieve this, otherwise regulatory encryption may not be effective. But this does not mean that we need to control distributed ledger technology. It has its advantages and potential. Other Asian countries, such as Singapore, have also seen the potential of DLT use cases, such as asset tokenization and cross-border payments, but cryptocurrencies do not have basic value.

Indian Finance Minister: Cryptographic Regulation Does Not Mean Technical Control

The Indian Finance Minister Nirmala Sitharaman recently stated at an interactive meeting in Karnataka, India that the G20 consensus is to create a global standard for regulatory encryption. She emphasized the importance of working together towards this goal, otherwise, regulatory encryption may not be effective. However, she also highlights the potential of distributed ledger technology (DLT), without the need to control it. This article will explore the G20 consensus on creating a global standard for regulatory encryption, the potential of DLT, and why cryptocurrencies do not have basic value.

G20 Consensus on Creating a Global Standard for Regulatory Encryption

At the G20 summit in Osaka, Japan in 2019, finance ministers and central bank governors of the world’s 20 largest economies agreed to work together to create a global standard for regulatory encryption. The goal is to have a coordinated and consistent approach to regulating the use of encryption technologies, such as blockchain.
The need for a global standard has become more pressing as digital currencies and other blockchain applications become more widely adopted. Encryption technologies have the potential for illicit activities such as money laundering and terrorism financing. A global standard would ensure that countries have a consistent approach to regulating these activities, without stifling innovation in the blockchain industry.
During the interactive meeting in Karnataka, India, Finance Minister Nirmala Sitharaman reiterated the importance of creating a global standard to ensure effectiveness in regulating encryption technologies. She also emphasized that it is important not to control DLT, as it has its advantages and potential for various use cases.

Potential of Distributed Ledger Technology

DLT, also known as blockchain, is a decentralized database that stores information across a network of computers. It is highly secure and transparent, making it attractive for various industries. Some Asian countries, such as Singapore, have already recognized the potential of DLT for use cases such as asset tokenization and cross-border payments.
The potential for DLT lies in its ability to eliminate intermediaries, reduce transaction costs, and increase efficiency. It also enables traceability and transparency throughout the supply chain, making it attractive for industries such as healthcare and real estate.
However, the potential of DLT does not extend to cryptocurrencies. Cryptocurrencies do not have basic value and are highly volatile, making them unsuitable as a means of payment or store of value. Despite this, the blockchain industry is still evolving, and new use cases for DLT are continually being explored.

Conclusion

Creating a global standard for regulatory encryption is crucial to ensure consistency and effectiveness in regulating encryption technologies. The potential of DLT for various use cases is evident, and it is important not to stifle innovation in the industry by controlling it. However, cryptocurrencies do not have basic value, and their volatility makes them an unreliable means of payment or store of value.

FAQs

1. What is regulatory encryption?
Regulatory encryption refers to the use of encryption technologies, such as blockchain, to regulate activities such as money laundering and terrorism financing.
2. What is the potential of DLT?
DLT has the potential to eliminate intermediaries, reduce transaction costs, increase efficiency, and enable traceability and transparency throughout the supply chain.
3. Are cryptocurrencies a reliable means of payment or store of value?
No, cryptocurrencies do not have basic value, and their volatility makes them unsuitable as a reliable means of payment or store of value.