Learn how the G20’s support will likely lead to a more balanced approach to crypto regulations
As stated by a senior government official, a blanket ban on this new emerging technology is unlikely because the G20 member nations have established a framework for the regulation of cryptocurrency assets by endorsing the recommendations of the International Monetary Fund (IMF) and the Financial Stability Board (FSB). The official stated, “If any country wants to ban it, you can ban it, but if the rest of the countries are not banning it, it will be very difficult to implement the ban.”
The official added that while the G20’s agreement on cryptocurrency regulation is significant, it would not be entirely effective unless a coordinated response is made by all the nations. In India, the policy discussions will now be placed on two fronts. India would advocate for a G20 regulation consensus on a multilateral scale. India requested that the G20 include the cryptocurrency issue on its agenda. The center is also advocating for agreement on cryptocurrency legislation among nations that are not G20 members. It needs to go beyond the G20, the official said.
According to the individual, the government will release a domestic rule that is in line with the consensus reached at the international platforms. The official’s remarks represent a shift from the previous position, in which India, and particularly the Reserve Bank of India, was one of the leading proponents of outlawing cryptocurrencies.
The official stated that the structure for potential crypto rules is complete and that the current focus is on regulations. The official continued, “The blueprint is here; the implementation portion needs to be worked on now. Ajay Seth, the center’s economic affairs secretary, gave a press briefing on Sunday outside of the Leaders’ Summit. The strategy for FSB and IMF crypto regulation has the support of our leaders, he stated. That is the maximum amount of G20 action that is possible.
The Financial Stability Board’s (FSB) high-level recommendations for the regulation, supervision, and oversight of crypto assets were supported by the G20 leaders on Saturday. The G20 New Delhi Leaders’ Declaration stated, “We request the FSB and SSBs (standard-setting bodies) to promote the effective and timely implementation of these recommendations consistently globally to avoid regulatory arbitrage.”
Seth responded, “The foundation is laid,” when asked what the G20 leaders’ support of the FSB recommendations meant for the future of cryptocurrency. We’ll decide in the next month how far you want to go beyond that. At the upcoming conference of finance ministers and central bank governors, which is slated to take place in October in Marrakech, Morocco, the G20 members are likely to continue the conversation on cryptocurrency legislation.
Currently, cryptocurrencies are mainly uncontrolled both globally and in India. Cryptocurrency had been outlawed by the RBI in 2017. In contrast, the RBI’s decision was overturned by the Supreme Court in 2020. A law regulating cryptocurrency was to be introduced into parliament by the government in 2021, however, Finance Minister Nirmala Sitharaman stated that this wouldn’t happen unless there was an international agreement. For this reason, during its G-20 Presidency, India made cryptocurrencies a top priority.
