India, which currently holds the G20 presidency, has requested the IMF and the Financial Stability Board (FSB) to jointly prepare a technical document on cryptocurrency assets. This can be used to create coordinated and comprehensive policies to regulate them.
According to an announcement from the Ministry of Finance, international organizations plan to present a joint report at the 4th Finance Ministers and Central Bank Governors Meeting in October 2023.
“To complement the ongoing dialogue on the need for a policy framework, the President of India proposed a joint technical paper by the International Monetary Fund (IMF) and FSB that would synthesize macroeconomic and regulatory perspectives on cryptocurrency assets. “This will help establish a coordinated and comprehensive policy approach to cryptocurrency assets.”
Overall, the IMF's discussion paper, policy seminar and IMF-FSB joint report are expected to consolidate policy questions related to macro-financial and regulatory perspectives on cryptocurrency assets and promote global consensus on a well-coordinated and comprehensive policy. They announced that they are accessing cryptocurrency assets.
Despite the rapid development of the cryptocurrency world, there is no comprehensive global policy framework for cryptocurrency assets. Given the increasing interconnectedness between cryptocurrency assets and the traditional financial sector, as well as concerns about the complexity and volatility of cryptocurrency assets, policymakers are calling for stricter regulation.
Global standard-setting organizations such as the Financial Action Task Force (FATF), Financial Stability Board (FSB), Committee on Payments and Market Infrastructures (CPMI), International Organization of Securities Commissions (IOSCO), and Basel Committee on Banking Supervision (BCBS) It said it has been coordinating its regulatory agenda while working within its institutional mandate.
India hopes to expand the G20 discussion on cryptocurrency assets beyond financial soundness issues and understand the macroeconomic impact on the economy and widespread adoption of cryptocurrencies. This will require data-driven information on the global challenges and opportunities of cryptocurrencies. He added that a grounded approach is needed. This will enable G20 member states to devise a coordinated and comprehensive policy response.
To inform policymakers of the broader macroeconomic and financial stability implications of cryptocurrency assets, the President of India has prepared a discussion paper for the IMF on the topics of the 2nd G20 Finance and Central Bank Delegates' Meeting to be held in Bengaluru on February 23, 2023. I asked you to do it.
“At this meeting, as part of the Presidency’s efforts to expand the conversation on cryptocurrency assets, a seminar titled “Policy Perspectives: Discussion on Policy Agreement on Crypto Assets” was held.
IMF Chairman Tommaso Mancini-Griffoli presented a discussion paper during the event, highlighting the impact of cryptocurrency adoption on the internal and external stability of national economies, as well as the structure of the financial system.
Mancini-Griffoli emphasized that the known benefits of cryptocurrency assets include cheaper and faster cross-border payments, more integrated financial markets and increased financial inclusion, but these have not yet been realized.
He also added that interoperability, safety and efficiency issues cannot be guaranteed by the private sector and that critical digital infrastructure/platforms for ledgers should be considered public goods.
He also pointed out the global information gap related to the world of crypto assets and the need to build a deeper understanding of the interconnections, opportunities and risks associated with crypto assets under the auspices of the G20.
The discussion covered a wide range of topics, including the need for a common taxonomy and systematic classification of the cryptocurrency world, the benefits and risks of cryptocurrencies that require further evaluation, macroeconomic policy questions that require further evaluation, financial stability issues, and regulatory responses.
The statement said that while the event helped start a broader conversation about cryptocurrency assets, it also raises several relevant policy questions that policymakers and regulators should closely evaluate.
In addition to assessing the impact of cryptocurrency assets on the broader economy, there are also existential questions about whether crypto assets are actually the optimal solution to existing problems in the global financial system, he said.
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(This story has not been edited by News18 staff and is published from a syndicated news agency feed – PTI)