India says it plans to develop global crypto-regulation rules
Individual legislative reforms will not solve the problem of cryptocurrency risks, it requires coordinated action by all countries, Indian Finance Minister Nirmala Sitharaman said
India, which holds the G20 presidency, intends to develop a common regulatory framework for all countries to combat cryptocurrency risks, Indian Finance Minister Nirmala Sitharaman said, The Indian Express reported.
Speaking at the Peterson Institute for International Economics (PIIE) in Washington, D.C., she noted that multiple shocks to the digital asset ecosystem have severely affected investors around the world and piecemeal legislative reforms will not solve the problem. Sitharaman stressed that coordinated action by all countries is needed.
"Cryptocurrencies are a very important part of the discussion during India's G20 presidency, given a large number of crashes and shocks in the cryptocurrency industry. We aim to develop common rules for all countries to address this issue," Sitharaman said.
The issue of global regulation of cryptocurrencies has been discussed for years by G20 central bank and finance ministry leaders. However, a slew of bankruptcies, hacks and collapses of cryptocurrencies in 2022 has increased regulators' attention to the industry.
In 2018, the G20 finance heads discussed the situation with cryptocurrencies and concluded that, despite the obvious risks, they did not pose a threat to global financial stability at the time. But all of the participants at the time were in favor of continuing to monitor the situation, and many of them supported the need to develop common regulatory principles.
At the same time, the Financial Stability Board (FSB), which oversees and develops legal measures for G20 financial policy, rejected several states' requests for an international legal framework to regulate the digital money market.
Over the past five years, the FSB has not developed any meaningful proposals for global regulation of the industry.
In late September 2022, the International Monetary Fund issued a report on digital assets, which called for the FSB to be recognized as a global coordinator for the development of uniform standards for regulating cryptocurrencies. The FSB was supposed to propose rules for regulating the cryptocurrency market to G20 representatives in October 2022.
Last December, then-Secretary General of the FSB Dietrich Domanski told the Financial Times that the organization would present global cryptocurrency regulations in early 2023 and "put them into effect quickly.
According to a program of publications on the FSB's website, final recommendations for regulating stablecoins and other crypto-assets will appear in July of this year.
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