Bitcoin rallies above $9,000 after positive G-20 cryptocurrency meeting, now up more than 20% from weekend lows

Key Points
  • Bitcoin prices topped $9,000 after finance ministers took a more hands-off approach to cryptocurrencies at a G-20 meeting in Argentina Tuesday.
  • "The spirit of the discussion was very productive, and I agree that everybody left very pleased," says Federico Sturzenegger, governor of the Central Bank of Argentina.
  • The cryptocurrency is up more than 20 percent from this weekend's lows.
A woman touches an ATM machine for digital currency Bitcoin in Hong Kong on December 18, 2017.
Anthony Wallace | AFP | Getty Images

Bitcoin prices recovered above $9,000 after regulators had "productive" discussions on cryptocurrency at a G-20 meeting of finance ministers and central bank governors in Buenos Aires, Argentina, on Tuesday.

"The spirit of the discussion was very productive, and I agree that everybody left very pleased," governor of the Central Bank of Argentina, Federico Sturzenegger, said Tuesday during a press conference. "It was a very good meeting."

Cryptocurrency discussions happened during a closed-door session earlier Tuesday, a spokesperson from the G-20 told CNBC.

Bitcoin rose more than 4.5 percent above $9,000 for the first time in a week, according to CoinDesk's bitcoin price index. The cryptocurrency was trading about 4.8 percent higher near $9,008 as of 4:13 p.m. ET, up 22.8 percent from a low of $7,335.57 hit over the weekend.

Bitcoin performance over the last week

Source: CoinDesk

Italy's central bank leader went a step further and told reporters after the meeting that cryptocurrencies pose risks but should not be completely banned, according to Reuters.

"My understanding is that there was an acceptance of continuing to work also on the stability side with the idea that this doesn't imply barring it," Ignazio Visco, the governor of the Bank of Italy, told reporters on the sidelines of the meeting, according to Reuters.

Discussions inside the room "devoted a lot of time" to crypto assets, and the group agreed regulation needs to keep up with the technology's fast pace, Argentina's Sturzenegger said.

The Argentine central banker outlined a summer deadline for G-20 members to have "specific recommendations on what to do" and said task forces are working to submit proposals by July.

Sturzenegger described an anonymous poll taken in the room at the beginning of the meeting of finance ministers, asking whether or not crypto assets should be included in multilateral discussions.

The results showed "very strong the support they have to be added in multilateral issues," Sturzenegger said, especially because of their potential as a "channel for the funding of terrorism for money laundering."

The money laundering issue has raised flags for other global regulators.

U.S. Treasury Secretary Steven Mnuchin said at a hearing before the Senate Banking Committee in late January that the department is paying particular attention to cryptocurrencies' potential use by criminals.

"I want to make sure that these are not used by bad guys, that they don't turn into Swiss numbered bank accounts," Mnuchin said, adding that the department wants to "make sure consumers understand the issues surrounding cryptocurrencies."

The former Goldman Sachs executive told CNBC in Davos that "in the U.S., our regulations [state that] if you're a bitcoin wallet, you're subject to the same regulations as a bank."

Bitcoin prices began recovering after an announcement by the Financial Stability Board on Sunday. The global watchdog took a cautious tone in a letter to G-20 members Sunday, and said that "crypto-assets do not pose risks to global financial stability at this time."

Other global regulators had reportedly planned to call for more global cooperation ahead of Tuesday's G-20 meeting.

Japanese representatives had reportedly said they would encourage G-20 counterparts to step up anti-money laundering efforts for cryptocurrencies, according to Reuters, which cited a government official with direct knowledge of the matter.

European Commission Vice President Valdis Dombrovskis said at February roundtable in Brussels that virtual exchanges and wallet providers should be under the "Anti-Money Laundering Directive," adding that the commission would "continue to monitor these markets together with other stakeholders, at EU and international level, including in the G-20."

Some in the bitcoin community want to police from within.

Early bitcoin bulls Tyler and Cameron Winklevoss submitted a proposal earlier in March to create a self-regulating body known as the Virtual Commodity Association. The nonprofit is meant to police digital currency markets, prevent fraud and develop industry standards, according to the press release.

Bitcoin's one-month performance

Source: CoinDesk

Bitcoin prices have fallen more than 25 percent in the past month, according to CoinDesk. The digital currency was trading above $11,000 in February. It dropped nearly 10 percent following the Securities and Exchange Commission announcement that crypto exchanges must register with the agency earlier in March.