The document could be used to formulate a coordinated and comprehensive policy to regulate crypto assets.
The G20 will come up with a universally acceptable international framework to regulate crypto assets and said that only a monetary unit backed by a central bank would qualify as a currency.
โTo complement the ongoing dialogue on the need for a policy framework, the Indian presidency has proposed a joint International Monetary Fund technical paper (IMF) and the FSB, which would synthesize the macroeconomic and regulatory perspectives of crypto assets,โ according to an official statement.
The joint document will be presented at the meeting of finance ministers and central bank governors in October 2023, it said.
The IMF discussion paper, policy seminar, and joint IMF-FSB paper are expected to integrate policy issues related to the macro-financial and regulatory outlook for crypto assets and facilitate a global consensus on a comprehensive and comprehensive policy approach. well coordinated for crypto assets. , according to the statement.
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It is almost clearly understood that anything that is not backed by the central bank is not a currency, India's finance minister has said. Nirmala SitharamanโWe are pleased that India's position is receiving recognition from others,โ Sitharaman said.
India was the first major economy to raise the dangers posed by cryptocurrencies. He Reserve Bank of India (RBI) had warned banks against accepting transactions involving cryptocurrency and warned that it could be used to finance terrorism and erode financial stability.
โThere is wide recognition and acceptance of the fact that cryptocurrency, or the asset, or whatever it is called, is a risk to financial stability, monetary systems and cyber security,โ RBI Governor Shaktikanta Das said. โThere will be a summary document on this whole issue of cryptocurrencies. That will form the basis for developing an international architecture.โ
Certainly, some of the technologies involved could be useful tools in developing the financial services sector, he said.
"There is now a wide acceptance of the risks involved," Das said. "There was agreement that this issue should be addressed with the overall goal of maintaining financial stability."
Minister Sitharaman said that the governor of the Canadian central bank said that cryptocurrencies "should not receive the regulatory seal of approval."
There have been calls for a global policy framework for crypto assets with various jurisdictions following different approaches in their treatment.
โWe have to differentiate between central bank digital currencies that are state-backed and stablecoins, and crypto assets that are privately issued,โ said IMF Managing Director Kristalina Georgieva. "There has to be a very strong push for regulation...if regulation fails, if you're slow to do so, then we shouldn't lift the ban on those assets, because they can create a risk to financial stability."
Global standard-setting bodies such as the Financial Action Task Force (FATF), the FSB, the Committee on Payments and Market Infrastructures (CPMI), the International Organization of Securities Commissions (IOSCO), and the Committee on Banking Supervision of Basel (BCBS) have been coordinating the regulatory agenda, working within their respective institutional mandates, according to the official statement.
India hopes to broaden the G20 discussion on crypto assets beyond financial integrity concerns and capture the macroeconomic implications and mainstream adoption of crypto in the economy, he said.
This, he added, will require an informed and data-driven approach to global crypto-asset challenges and opportunities, allowing G20 members to shape a coordinated and comprehensive policy response.
To inform policymakers on the broader macroeconomic and financial stability implications of crypto assets, the Indian presidency requested the IMF to prepare a discussion paper on the topic for the second G20 finance and central bankers meeting held in Bangalore on February 23.
"During the said meeting, a seminar titled 'Policy Perspectives: Debating the Pathway to Policy Consensus on Crypto Assets' was held, as part of the Presidency's efforts to broaden the dialogue on crypto assets," it said.
IMF speaker Tommaso Mancini-Grifoli introduced the discussion paper during the event, highlighting the consequences of cryptocurrency adoption on the internal and external stability of a country's economy, as well as the structure of its financial system. .
He also noted the global information gaps related to the crypto-asset universe and the need to develop a deeper understanding of the interrelationships, opportunities, and risks related to crypto-assets under the aegis of the G20.
Discussions covered a wide range of topics, including the need for a common taxonomy and systematic classification of the crypto-asset universe, the benefits and risks of crypto-assets, macroeconomic policy issues that needed to be further evaluated, and stability issues. financial and regulatory responses. .
