The intergovernmental forum, Group of Twenty (G20) welcomes the call made by the Financial Stability Board (FSB) for tougher rules to guide the global cryptocurrency industry, Nirmala Sitharaman, the Finance Minister of India, said during a press conference held today (Tuesday) in India. India retains the current presidency of the G20.
Where Will G20 Stand on Crypto?
On Monday, FSB, whose members comprise the United States, the European Union, China and the UK, issued a regulatory framework to guide crypto-asset activities in the wake of the collapse of the crypto exchange, FTX and the digital asset lender, Celsius in 2022. The framework includes enhancements targeted at ensuring adequate protection of client assets, addressing the risks associated with conflicts of interest, and strengthening cross-border cooperations.
🚨Crypto Buzz: The Financial Stability Board is set to shake up the #crypto world with stricter rules! 💥 pic.twitter.com/Zc4vRXdmP7
— Crypto Bookworm (@crypto_bookworm) July 18, 2023
The recommendations focus on mitigating financial stability risks and do not exhaustively cover all specific risk categories related to crypto-asset activities, Finance Magnatesreported. Central bank digital currencies, viewed as digitalized central bank liabilities, are also not subject to these recommendations.
However, speaking on the recommendations, Sitharaman noted that the G20 during its third Finance Ministers and Central Bank Governors Meeting held on Tuesday in Gujarat, India, deliberated on the regulatory challenges posed by the crypto asset ecosystem.
“Members welcomed the high-level recommendations of the FSB on crypto asset activities and also the global stablecoin arrangement,” Sitharaman said during the press briefing held after the meeting.
The Indian Finance Minister pointed out that members of the forum discussed the country’s G20 presidency note on cryptocurrency, without specifying what was discussed.
“Members also discussed the presidency note that India has prepared and noted that it will be an important input toward prioritising areas of work essential for achieving a comprehensive, cohesive, and coordinated global policy and regulatory frameworks,” Sitharaman added.
Different Worldview
The G20’s positive gesture to the recommendations made by the FSB was made as the Bank for International Settlements (BIS) earlier urged the group to dismiss digital assets, noting that they have ‘inherent structural flaws’. The BIS, which is a group encompassing the world's major central banks, added that there is a lack of accountability in the cryptocurrency ecosystem.
Meanwhile, recent developments across the crypto industry show that major stakeholders across the global financial markets see digital asset regulation in a different light. While the European Union recently passed the Markets in Crypto-Asset (MiCA) regulation, becoming the first major jurisdiction to introduce a comprehensive law to regulate the crypto industry, the US federal securities regulator in recent months stepped up its campaign against ‘unregistered’ crypto exchanges, seeking their compliance with decades-old securities law through the court.
On the other hand, the UK recently sanctioned a new law that empowers public authorities to regulate digital assets and supervise crypto promotions. The new regulation is part of the country’s plan to turn the country into a crypto hub.
Similarly, in Asia, Hong Kong recently rolled out new rules for its crypto industry and has already captured the attention of 80 local and foreign digital assets firms. Singapore, another country in the region, has stated its interest in becoming a global crypto hub.
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