India is attempting to forge an international agreement on the regulation of these assets, arguing that given the cross-border scale, scope, and difficulties posed by cryptocurrency, only an international collaboration would be effective.
According to India’s Finance Minister Nirmala Sitharaman, G20 ministers have acknowledged India’s stance on cryptocurrencies. It is anticipated that by September when Delhi will be hosting the G20 summit, discussions on a global framework to cope with digital currencies will be finished.
Meanwhile, according to RBI Governor Shaktikanta Das, some G20 participants advocated for the possibility of outright banning cryptocurrencies.
“Almost everyone agrees that anything not given out by the central bank is not money. And this is a stance that India has held for a very long time; we are pleased that so many members are now acknowledging it,” said Finance Minister Nirmala Sitharaman at a news conference following the very first G20 Finance Minister and Central Bank Governors (FMCBG) meeting on Saturday i.e Feb 25, 2023.
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A timetable has been created to wrap up the conversation. A discussion document has already been published by the International Monetary Fund. Future side meetings on cryptocurrency assets are planned for the IMF-World Bank Meetings in April in Washington.
By July of this year, the Financial Stability Board (FSB) will have completed its high-level suggestions, which will be discussed at the upcoming FMCBG meeting in Gandhi Nagar regarding the regulation, supervision, and oversight of global stablecoin and crypto-asset markets and activities.
The Bank for International Settlement, or BIS, will present a report on conceptual and analytical issues, as well as potential risk-mitigation measures, linked to cryptographic assets. In September 2023, IMF and FSB will finally collaborate to present a synthesis paper integrating the macroeconomic and regulatory views of crypto assets.
Multiple alternatives are being considered in G20 meet
Sitharaman also emphasized viewpoints made during the G20 meeting by different delegates. The governor of the Canadian Central Bank has issued a warning against approving digital assets without a carefully considered regulatory strategy. According to the World Bank, all policy frameworks should consider the opinions of all emerging nations.
Shaktikanta Das, governor of the RBI, said that various alternatives are being thought about moving forward. But he added that it is still too early to speculate about the final design.
Yes, there were opinions suggesting it be controlled to limit and check its spread as well as to manage its risks. Some people felt that the possibility of a ban or restriction should also be taken into account. However, this is still a work in process, the Governor said.
He also emphasized that each nation is autonomous. “The countries will decide what to do. But once a G20 decision is made, it is only reasonable to assume that most governments will adopt the agreed-upon course of action, according to Das.
The truth is that cryptocurrencies, or crypto assets, “involve several significant risks to financial stability, to currency systems, to problems with cyber security, and overall financial stability and they need to be looked at,” he continued, has now gained widespread recognition and acceptance.