Japan plans to urge its G20 counterparts next week to strengthen efforts to prevent cryptocurrencies from being used for money laundering, according to a government official, Reuters reported.

However, the likelihood of the G20 finance leaders to agree on specific global rules and discuss them in a joint communique are low, considering the differences in each country’s approach, the official said. Another official involved in the talks next week offered the same view.

One official said the discussion will address consumer protection and anti-money laundering measures, as opposed to cryptocurrency trading’s impact on the banking system.

G20 Officials Wary Of Strict Rules

The G20 members are reluctant to support strict regulations, the official said.

G20 Central bankers and finance ministers will meet March 19 and 20 in Buenos Aires. Cryptocurrencies is on the agenda.

The Financial Action Task Force (FATF), a group of 37 nations set up by the G7 industrial powers to counter illicit finance, will report its finding on keeping cryptocurrencies from being used in money laundering.

Policymakers in Japan are wary that while G20 nations agree action is needed, member nations have different levels of strictness in their regulations, creating loopholes for money laundering, according to one official.

Japan was the first nation to establish a nationwide system to monitor cryptocurrency trading. The country checked on several exchanges this year following the heist of $530 million from the Coincheck Inc. exchange.

Also read: French, German finance officials call for global crackdown on cryptocurrency

European Leaders Seek Action

Germany and France have committed to making joint proposals to regulate bitcoin. A European Union official said a short-term strategy could apply rules on anti-money laundering and terrorist financing, and warn consumers about the risk of trading cryptocurrencies and prevent banks from holding them.

The challenge nations face, according to Japanese officials, is to apply regulations to prevent illicit activity and protect consumers without undermining cryptocurrency and fintech innovation.

Featured image from Shutterstock.