“To complement the ongoing dialogue on the need for a policy framework, the Indian presidency has proposed a joint International Monetary Fund (IMF) and FSB technical paper, which would synthesize the macroeconomic and regulatory outlook for crypto assets. This will help in formulating a coordinated and comprehensive policy approach for crypto assets," he said.
As a whole, 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 policy comprehensive and well coordinated. focus on crypto assets, he said.
Despite the rapidly evolving crypto universe, there is no comprehensive global policy framework for crypto assets. Given concerns about further interconnectedness between crypto assets and the traditional financial sector, as well as the complexity and volatility Around crypto assets, policymakers call for stricter regulation.
Global standard-setting bodies such as the Financial Action Task Force (FATF), the Financial Stability Board (FSB), the Committee on Payments and Market Infrastructures (CPMI), the International Organization of Securities Commissions (IOSCO) and the Basel Committee on Banking Supervision (BCBS)) have been coordinating the regulatory agenda, while working within their respective institutional mandates, he said.
India hopes to broaden the G20 discussion on crypto assets beyond financial integrity concerns and capture the macroeconomic implications and widespread adoption of crypto in the economy, he said, adding that this willpower require an informed and data-driven approach to global crypto-asset challenges and opportunities, enabling G20 members to shape a coordinated and comprehensive policy response.
To inform policymakers about the broader macroeconomic and financial stability implications of crypto assets, he said, the Indian presidency requested the IMF to prepare a discussion paper on the subject for the 2nd Meeting of Finance and Central Bank Deputies of the G20 held in Bangalore on February 23, 2023. "During the said meeting, a seminar titled "Policy Perspectives: Debating the Path to Crypto Asset Policy Consensus" was held, as part of the Presidency's efforts to broaden the dialogue on crypto assets," he said.
IMF speaker Tommaso Mancini-Grifoli introduced the discussion paper during the event, highlighting the consequences of crypto adoption on the internal and external stability of a country's economy, as well as the structure of its financial system.
Mancini-Grifoli stressed that the purported benefits of crypto assets include cheaper and faster cross-border payments, more integrated financial markets, and greater financial inclusion, but these have yet to materialize.
He further added that interoperability, security and efficiency issues cannot be guaranteed by the private sector and critical digital infrastructures/platforms for ledgers should be considered a public good.
He also pointed to global information gaps related to cryptography. asset universe and the need to build 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 questions that needed to be further evaluated; and financial stability issues and regulatory responses.
The statement said that the event has helped start a broader dialogue on crypto assets, but also raises several pertinent policy issues that lawmakers and regulators need to closely evaluate.
In addition to assessing the consequences of crypto assets for the broader economy, there is also an existential question as to whether crypto assets are truly the optimal solution to existing challenges in global financial systems.
