Crypto Regulations Discussed Amongst G20 Nations
A 3-day meeting of G20 Nations was held under India’s Presidency in Bengaluru, India between 13th till 15th December 2022. The meeting was attended by deputies from the central banks of G20 nations as well as G20’s finance personnel.
During the 3-day long meeting sessions, the G20 Nations discussed and dilated upon the need for crypto regulation.
In the post-meeting press conference, Economic Affairs Secretary of India, Ajay Seth, one of the meeting agendas was crypto regulation.
Seth suggested that the G20 countries unanimously agreed upon the need to immediately regulate the digital asset industry.
Why Globalization of Crypto Regulation Is Vital?
He stated that every participant asserted that in order to effectively regulate the industry, the globalization of crypto regulation is vital.
India’s Economic Affairs Secretary was later quoted also by the internationally renowned online news outlet, Reuters.
According to Reuters, Seth acknowledged that ‘of course’, there are implications stemming from crypto upon economies, banking system, and financial policies”.
However, he urged G20 nations that a consensus needs to be arrived at on the basis of thoroughly studying and reviewing digital assets.
Seth remarked that regulation must first be made on the basis of policy view. He then said that one of the agendas discussed in the meeting was to form a unanimous policy with everybody’s consent.
It is only thereafter that a consensus on the globalization of digital assets can be arrived at, emphasized Seth.
India is currently at the forefront of bringing huge changes to the cryptocurrency industry. Its central bank (Reserve Bank of India) is on top of the entire matter and wants cryptocurrencies to be regulated.
In addition to the above, the RBI wants to monitor the entire cryptocurrency sector through a global regulatory framework.
This way, the RBI wants to ensure that unregulated and risky crypto projects do not get introduced into the public markets.
Therefore, it wants to put a ban on cryptocurrency projects that are unregulated and full of risks.
The rationale behind Pushing Crypto Regulation at Global Level
When FTX laid down arms against the liquidity crisis and suffered bankruptcy, the crisis raised worldwide calls for strict regulatory oversight.
FTX crisis took place in the US, which too is part of G20 nations, however, the impact of the FTX crisis became apparent worldwide.
FTX was amongst the top three crypto firms in the world whose lenders only exceed a million.
It traded crypto worth billions of dollars every day and was custodial of hundreds of billions of dollars of its members.
However, the liquidity crisis destroyed the foundation of the globally renowned crypto platform which is now under investigation in multiple states, including the US.
It is because of FTX that the world has become extremely concerned about the crypto industry and its impact on global economies.
It is in this connection that G20 Nations are calling upon a uniform policy and set of rules for regulating the crypto industry.
IMF’s Key Personnel on Standardization of Crypto Rules
Gita Gopinath, who is also an Indian, is currently the Dy. MD of IMF. She remarked that India as G20 Nations’ President can play a vital role in the formation of unified and effective crypto regulation.
She suggested that India’s expertise could be instrumental in three crucial aspects. She claimed that one of these crucial aspects is crypto regulation, apart from climate finance and debt management.
IMF’s Dy. MD is also visiting the homeland in connection with the G20 Nations’ meeting.
The Need to Have Globally Accepted Crypto Standards
Gopinath emphasized that globally accepted standards are required for the purposes of crypto regulations.
She insisted that when the crypto meltdown took place, it subsequently gave birth to the need for globally accepted crypto standards. She also suggested that such globally accepted crypto standards can be achieved next year.
Meanwhile, Seth also stated that in the upcoming meeting, the participants shall also discuss CBDCs use at the global level.