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According to the paper released following a two-day G20 Finance Ministers and Central Bank Governors meeting in Bengaluru, India, the institutions will introduce the standards for global crypto regulation in July and September.
The group of the 20 biggest economies of the world that comprises 19 countries and the European Union (EU) – or simply G20 – has announced that by July this year, the Financial Stability Board (FSB), the International Monetary Fund (IMF), and the Bank for International Settlements (BIS) will be ready with the regulatory framework for the crypto industry. According to the paper released following a two-day G20 Finance Ministers and Central Bank Governors meeting in Bengaluru, India, the institutions will introduce the standards for global crypto regulation in July and September.
The Finance Ministers and Central Bank Governors of G20 countries stated:
“We welcome ongoing work by the FSB and international standard setters to ensure that the crypto-assets ecosystem, including so-called stablecoins, is closely monitored and subject to robust regulation, supervision, and oversight to mitigate potential risks to financial stability.”
Further, the document reads:
“We look forward to the IMF-FSB Synthesis Paper which will support a coordinated and comprehensive policy approach to crypto-assets, by considering macroeconomic and regulatory perspectives, including the full range of risks posed by crypto assets.”
The document also addressed such issues as the war in Ukraine and its impact on the global economy, earthquakes in Turkey, debt vulnerabilities in low and middle-income countries, climate change, and more.
Progressing towards Crypto Regulatory Framework under India’s Presidency
Notably, it was the first time the meeting was held in India. During the event, India’s Central Bank Governor Shaktikanta Das said that there was a marked shift in perception around crypto assets by G20 nations in 2022 which resulted in the collapse of several major crypto companies, including FTX, and global contagion.
Meanwhile, Indian Finance Minister Nirmala Sitharaman urged for a framework to regulate cryptocurrencies during the event. Back in November 2022, we reported that the country made it clear that cryptocurrency regulation would be a top concern during its year-long presidency of the G20.
Nirmala Sitharaman said that “recognizing the risks attached to the private virtual assets, G20 nations moved a step closer to developing a coordinated and comprehensive policy approach to deal with the crypto assets by considering macroeconomic and regulatory perspectives.”
Last year, Sitharaman imposed a 30% fixed tax rate on all income generated through crypto trading and nonfungible tokens (NFTs). The rate remains the same irrespective of the nature of income. In other words, it does not matter if it is an investment income or business income and is irrespective of the holding period.
United States Treasury Secretary Janet Yellen also agreed that it is crucial to set a strong regulatory framework. She also clarified that the US did not propose an outright ban on cryptos.
“There has to be very strong push for regulation… if regulation fails, if you’re slow to do it, then we should not take off the table banning those assets, because they may create financial stability risk. … We haven’t suggested outright banning of crypto activities, but it is critical to put in place a strong regulatory framework … We’re working with other governments,” stated Yellen.
The next meeting will take place in July this year. Then, in September, the G20 Summit 2023 will be held in India. It will be a big G20 event that will definitely bring more clarity to the crypto regulatory framework.