- India is using its status in the G20 to strengthen regulation of cryptocurrencies.
- The new rules will affect digital assets, stablecoins and decentralized finance (DeFi).
- All decisions have been agreed with the International Monetary Fund (IMF) and the Financial Stability Board (FSB).
India has used its status as head of the G20 to support the development of global rules for cryptocurrencies. The world’s largest nation by population released a memo detailing recommendations for regulating digital assets.
“We have a need for consistent implementation of regulations on cryptoassets. We hope that this will help to prioritize, harmonize and coordinate policies. We need to create a legal and regulatory framework for further work,” a note to the document says.
The proposed initiative will be aligned with the recommendations of the International Monetary Fund (IMF) and the Financial Stability Board (FSB), which will be released in September. The paper will detail the regulatory approach for all digital asset classes.
India has made several recommendations to international organizations. The G20 chair wants the IMF and FSB to:
- examine regulatory arbitrage and corporate choice-of-jurisdiction practices;
- assess macrofinancial risks associated with emerging market and developing countries;
- continually supervise risks associated with cryptoassets;
- focus on consumer protection.
Some organizations have already established regulatory frameworks for cryptocurrencies. For example, the Financial Action Task Force (FATF) has introduced rules for sharing customer data (Travel Rule).
The Organization for Economic Cooperation and Development (OECD) has created a reporting system for cryptoassets. For their part, the Basel Committee on Banking Supervision (BCBS) and the Bank for International Settlements (BIS) have issued guidance for banks.
Basel Committee on Banking Supervision (BCBS) and the Bank for International Settlements (BIS) have issued guidance for banks.