August 3, 2023

India Leads G20 Efforts To Outline Global Crypto Framework



India, which currently assumes the presidency of the G20, voiced its support for the Financial Stability Board’s (FSB) recommendations to outline a global crypto framework, which was published in July.

On August 1, India shared its presidency note for input in a global framework for cryptocurrency. The note agreed with the guidelines set by the Financial Action Task Force (FATF), the International Monetary Fund (IMF), and the FSB. However, India also suggested some additional emphasis on developing countries within the guidelines.

The IMF is already taking developing economies into account in its potential guidelines for cryptocurrency, but India urged the FSB to do the same. The note also recommended outreach to all jurisdictions to raise awareness of potential risks, beginning with countries with higher levels of cryptocurrency adoption. Furthermore, India suggested that the future regulatory approach to the digital economy should extend beyond the scope of the G20.

At the end of August, the IMF and FSB are expected to release a Synthesis Paper that provides a roadmap for the G20 to consider. In July, the FSB published guidelines for crypto and stablecoins.

According to the FSB, crypto platforms must separate clients’ digital assets from their own funds and clearly distinguish functions to avoid conflicts of interest. Regulators must ensure tight cross-border cooperation and oversight. The guidelines also require stablecoin issuers to obtain a national license in a single jurisdiction before operating there.

The objective of establishing a worldwide and unified plan is to assist nations in implementing a mutually agreed upon minimum policy standard for cryptocurrency assets. This standard would aim to protect countries’ macroeconomic, financial stability, and financial integrity, ensure that investors and users are informed, educated, and protected appropriately, and encourage the development of the underlying technology while fostering innovation in the financial sector.

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