Digital Assets: G20 Asks The IMF And FSB To Prepare Technical Paper On Global Crypto Regulation
India initiates a move for a coordinated regulatory mechanism for crypto assets.
The International Monetary Fund (IMF) and the Financial Stability Board (FSB) are working together to develop a technical paper that proposes a coordinated global approach for regulating crypto assets. The paper will be presented at the next meeting of G20 Finance Ministers and Central Bank Governors in October.
While the Reserve Bank of India has called for an outright ban on crypto currencies and assets, Finance Minister Nirmala Sitharaman has argued for a coordinated regulatory mechanism for such assets instead of individual countries adopting different policies and regulations. (The Hindu)
U.S. Treasury Secretary Janet Yellen has also supported the idea of international cooperation to set high regulatory standards for crypto assets and reduce the cost of cross-border payments.
The Indian Presidency of the G20 had requested the IMF to prepare a discussion paper to inform policymakers on the broader macroeconomic and financial stability implications of crypto assets. Accordingly, at a seminar of the G20 Finance and Central Bank Deputies, the IMF had highlighted (“Policy Perspectives: Debating the Road to Policy Consensus on Crypto Assets”) the consequences of crypto adoption on the internal and external stability of a country’s economy and the structure of its financial system.
The IMF also flagged the global information gaps regarding the crypto asset universe and the need to build a deeper understanding of the interlinkages, opportunities, and risks of crypto assets under the G20. Participants at the seminar discussed the need for a common taxonomy and systematic classification of the crypto asset universe, macroeconomic policy questions, financial stability issues, and regulatory responses.
There was a consensus among G20 participants that beyond the consequences of crypto assets to the broader economy, there was the most basic question: Are crypto assets indeed the optimal solution for existing challenges facing global financial systems?
The IMF’s discussion paper, the policy seminar, and the joint IMF-FSB paper are expected to facilitate a global consensus on a well-coordinated and comprehensive policy approach to crypto assets.
Related Story: ECB’s Lagarde Lashes Out At Bitcoin
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