FM at G20 Meet: ‘Global consensus needed to regulate crypto’

Union Finance Minister Nirmala Sitharaman, on the outcomes of the 3rd G20 Finance Ministers & Central Bank Governors Meeting in Gandhinagar, says "global consensus" is required for regulating "crypto assets", and to assess its effect on the emerging markets.

The 3rd G20 Finance Ministers and Central Bank Governors Meeting summary says the G20 members continue to "closely monitor" the risks of the fast-paced developments in the crypto-asset ecosystem.

They have endorsed the Financial Stability Board’s (FSB’s) high-level recommendations for the "regulation, supervision and oversight of crypto-assets activities and markets and of global stablecoin arrangements.

"We ask the FSB and standard-setting bodies (SSBs) to promote the effective and timely implementation of these recommendations in a consistent manner globally to avoid regulatory arbitrage. We welcome the shared FSB and SSBs work plan for crypto assets," the statement adds.

The report also says India has prioritised the need to consider "macro-financial implications" of crypto assets, along with financial stability concerns. The 3rd FMCBG meeting also focused on bringing the specific concerns of the Global South onto the crypto assets’ agenda.

Notably, the IMF, in February, presented a paper on the macro-financial implications of crypto to the 2nd G20 FMCBG. The Financial Stability Board (FSB) also included sections on emerging markets and developing economies' concerns. In continuation of this process, in the July meeting, the G20 members welcomed the high-level recommendations of the FSB on "crypto-asset activities and global stablecoin arrangements."

The statement says while the work of preparation of the "IMF-FSB Synthesis" paper is underway, the Indian Presidency has submitted a “Presidency Note” to the G20 membership, laying down important inputs for a roadmap on crypto assets.

"The Roadmap, to be contained in the Synthesis Paper will support a coordinated and comprehensive policy and regulatory framework taking into account the full range of risks, and risks specific to the emerging market and developing economies (EMDEs) and ongoing global implementation of FATF standards to address money laundering and terrorism financing risks."

The G20 now looks forward to receiving the IMF-FSB Synthesis Paper, along with the Roadmap, before the Leaders’ Summit in September 2023, says the report.

To frame the ongoing policy work around crypto, a roundtable discussion “Policy Dialogues on Crypto Assets” was organised on the sidelines of the 3rd G20 FMCBG meeting at Gandhinagar. The aim of the round table session was to discuss and deliberate on some of the key questions pertaining to the crypto assets, in an open and candid manner.

Sitharaman says India has been able to take the issues to the G20, which the Global South had raised in 'Voice of the Global South Summit'.

India has been able to push the agenda of "debt distress", which is happening in the Global South as well, and there's a need for a speedy and effective resolution. "I'm glad that since February when we started talking about the issue, resolutions are now happening speedily and effectively," she adds.

The FM says the G20 meetings under India's presidency were organised under five thematic heads -- global economy, global health, sustainable finance and infra, international finance architecture, international taxation & finance, and financial inclusion. "India's presidency received wide support on all agenda items," FM says.

She says India's G20 Presidency has brought Digital Public Infrastructure (DPI) agenda to the table, and that members acknowledged the significant role of DPI in rapidly advancing financial inclusion and productivity gains.