G20 Summit: India hopes for common template for regulating cryptocurrency

New Delhi, September 7

Will the G20 Summit here finalise a common template for regulating cryptocurrency after deliberations that have spanned five years?  It was at the Buenos Aires summit in 2018 that the G20 leaders resolved to regulate crypto-assets to counter money-laundering and the financing of terrorism.

The delegations and Sherpas are currently mulling over two documents that will form the bedrock of cryptocurrency regulations. The first is a joint synthesis paper prepared by IMF and Financial Serivces Board and the second a Presidential note by India.

The FSB has said crypto-assets currently don’t not pose risks to global financial stability because they are not substitutes for currency. They also have very limited use for real economy and financial transactions. But “the market continues to evolve rapidly, however, and this initial assessment could change if crypto-assets were to become significantly more widely used or interconnected with the core of the regulated financial system,” it says.

Besides identifying monitoring of emerging financial stability risks, there are also issues relating to consumer and investor protection besides illicit activity, money laundering and terrorist financing.

India has taken the stand that cryptocurrency is borderless and therefore requires global collaboration for regulations.

India is also hoping for the G20 presidency to achieve consensus on a common framework on debt vulnerability issues with 75 per cent of nations facing debt repayment issues of various severities. Its another focus is not the Multilateral Development Banks (MDBs). G20 members are currently weighing suggestions from the subgroups to implement the proposed recommendations, including a $200 billion fund for financing over the next decade.