During this week's discussions at the G20 meeting, some members expressed their views on considering a complete ban on cryptocurrencies, said Reserve Bank of India (RBI) Governor Shaktikanta Das. Das made the comments at the conclusion of the two-day meeting of finance ministers and central bank governors in Bengaluru on February 25. The discussions included proposals on developing an international architecture for crypto regulation. India, in collaboration with the International Monetary Fund (IMF) and Switzerland-based Financial Stability Board (FSB), proposed a joint technical paper. The paper would help develop policies for the crypto space by synthesizing macroeconomic and regulatory perspectives on crypto assets.
India's Finance Minister Nirmala Sitharaman, who led the media briefing, said that G20 members recognized that the technology underpinning crypto assets is useful for financial technology. However, the members also understood that anything issued by an entity other than the central bank is not a currency. Sitharaman said that side events are proposed on crypto assets at the IMF-World Bank Spring Meetings in April in Washington, with the FSB's paper on crypto assets regulation to be tabled in July.
The IMF-FSB synthesis paper will form the basis for future discussions to develop an international architecture on crypto. Das said that the discussions were ongoing and the paper was a work in progress. He added, "ultimately, every country is a sovereign country. The countries will take their decisions. But once something is agreed in the G20, naturally, it would be expected that countries would by and large follow whatever is the agreed position."
Das also said that the discussions at the G20 meeting showed that there was a wide recognition and acceptance that cryptocurrencies posed a major risk to financial stability and monetary systems, along with attendant cyber security issues. India is looking to build an international consensus on crypto regulation, arguing that only global collaboration would be effective given the cross-border scale, scope, and challenges presented by crypto.
It was reported earlier on February 25 that finance ministry officials and central bankers from G20 countries were seemingly in agreement on regulating crypto assets, with a complete ban on them also on the table. As the discussions continue, it remains to be seen what policies and regulations will be developed for the crypto space.