According to Union Finance Minister Nirmala Sitharaman, issues relating to crypto assets demand quick attention, and the G20’s response must make sure that they do not lose any potential benefits while safeguarding economies from harm.
Sitharaman took part in a brainstorming session on the “Macro financial Implications of Crypto Assets” on Friday at the IMF’s headquarters in this city with G20 finance ministers and governors of central banks.
Presently, India is in charge of the G20’s annual rotating presidency.
Cryptocurrency-related issues have been a hot topic of debate among G20 members, and all agree that it is urgent to regulate this industry.
International specialists on this problem were present for the brainstorming session.
Sitharaman stated in her remarks that the G20 appreciates the efforts of the Financial Stability Board (FSB) and the International Monetary Fund (IMF) in identifying important components of the framework for policy and regulation. She also referred to the requirement for a synthesis study on crypto assets that would include macroeconomic and regulatory viewpoints.
According to the minister, the G20 members concur that there should be a globally coordinated policy response on crypto assets that considers the whole range of risks, including those that are specific to emerging markets and developing economies.
The G20 has responded properly and quickly to the crypto challenge, she noted, and she is pleased to report that there is growing acceptance among all G20 members of the need for global action on crypto assets.
In conjunction with the annual spring meetings of the International Monetary Fund (IMF) and the World Bank, Sitharaman and Reserve Bank of India Governor Shaktikanta Das co-chaired a gathering of finance ministers and central bank governors from member countries. A discussion of cryptocurrencies and their challenges was covered at the meeting.
She responded to a query with, The G20 and its members agree that it’s not going to be possible for an independent standalone country to deal with the crypto assets and that it has to have a worldwide coordinated view on how to go about regulating crypto assets.
According to Sitharaman, the way they are seeing this play out during their administration is that the FSB’s (Financial Stability Board) document will also be taken up, and a synthesis paper will be made from the IMF paper and the FSB paper both put together.
A discussion will take place in September and October, and the finance minister predicted that at the conclusion of those meetings, they will see a roadmap being prepared on how and what kind of understanding the members of the G20 have in this, and it can be taken further on specific actions of regulation as and when the G20 takes a call on it.
Sitharaman stated that while she does not like to preempt a decision, the work done by the FSB and the IMF indicates that crypto assets, particularly those that are outside of central banks and are not backed by any sovereign asset, can result in macroeconomic instability.
As a result, she said, we are now in a position to observe how nations are realizing that the issue is not just one of regulating crypto assets, where nations will need to work together, but also one of macroeconomic stability, as the IMF dealing with it has this time brought up.
Christine Lagarde, the head of the European Central Bank, spoke about particular instances of how money was channelled into this operation today, and the minister expressed his gratitude for her remarks. “Too many such companies are getting involved in it, and they are raising questions about where the trail is, so I’m very glad to have heard her speak,” the minister said.
It was a very substantive conversation, as Sitharaman emphasized, and everyone there agreed that yes, it has to be handled globally.
