By
Chimamanda U. Martha
April 19th, 2024
The G20 is working to create a global crypto policy consensus for better asset regulation and accountability.
The G20 governments are reportedly working on developing a unified crypto policy. If successful, this crypto policy should function as a framework that all member countries should follow to regulate digital assets.
Commenting on the development, India’s federal economic affairs secretary, Ajay Seth, explained at a press conference Wednesday:
“The regulation should flow from the policy view taken. In fact, one of the priorities which have been put on the table is to help countries build a consensus for policy approach to the crypto assets.”
The economic leaders of these G20 nations reckon that a policy consensus regarding crypto assets would lead to better global regulation. To inform the agreement on crypto regulation, Seth called for the study of a range of fiscal specificities. These include monetary policy, the banking sector, and crypto’s economic implications.
The first G20 central bank deputies meeting takes place this week in Bengaluru, India, between December 13th and 15th. The Southern Asian nation assumed its one-year role of the G20 presidency at the beginning of December, succeeding Indonesia. In addition to crypto deliberations, the talks in Bengaluru have covered a range of macroeconomic issues. These include financing for climate action and sustainable development goals, global debt vulnerabilities, and consolidating multilateral development banks.
G20 Crypto Policy Forum Comes as a Necessity Following the FTX Implosion
The crypto consensus discussions come following the sudden collapse of one-time prominent exchange FTX. The company filed for Chapter 11 Bankruptcy in early November, which sent shockwaves throughout the entire crypto space. In the aftermath of FTX’s implosion, several other crypto-focused firms have encountered varying degrees of insolvency crises. Furthermore, there are more pronounced calls for better airtight regulations of digital assets.
Bahamian authorities arrested former FTX chief executive officer Sam Bankman-Fried on Monday on orders from the United States government. The disgraced ex-CEO faces extradition to the US to face several criminal charges. These include wire fraud and conspiracy, in addition to misuse of customers’ funds.
Other Intergovernmental Organizations Also Clamor for Better Crypto Regulation
The G20 is one of many intergovernmental organizations stepping up its crypto regulatory efforts. The Organisation for Economic Co-operation and Development recently released a report imploring urgent policy action. Like the G20, this global forum also called for international collaboration regarding crypto policy. According to the Organisation for Economic Co-operation and Development, a harmonized effort on crypto oversight would avert regulatory arbitrage opportunities and global policy fragmentation.
India’s Finance Minister, Nirmala Sitharaman, fully supports global collaboration on future crypto oversight. She expressed criticism of digital currencies in July and stated that the Reserve Bank of India (RBI) does not view crypto as currencies. According to Sitharaman, the reason is that every modern currency requires the backing of a central bank or government. She said at the time:
“Cryptocurrencies are by definition borderless and require international collaboration to prevent regulatory arbitrage. Therefore, any legislation for regulation or for banning can be effective only after significant international collaboration on evaluation of the risks and benefits and evolution of common taxonomy and standards.”
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