G-20 agrees on global understanding on crypto assets

Members of the G-20 agree that a globally coordinated understanding would not only deal with the challenges posed by crypto assets but also regulate them, according to the Union Finance Minister Nirmala Sitharaman.

The grouping has responded to the issue with alacrity and during India's presidency of the G-20, a synthesis paper will be taken up on matters related to crypto assets, the minister said.

He added: I am glad to say that there is a greater acceptance among all G 20 members that any action on crypto assets will have to be global, and added that the G 20, I think, has responded fairly with alacrity on the crypto challenge.

On the sideline of the annual spring meeting of the IMF and the World Bank, Nirmala Sitharaman, along with Reserve Bank of India Governor Shantikanta Das, co-chaired a meeting of finance ministers and central bank governors from member countries.

At the meet, issues related to crypto currency and its challenges were discussed.

The G 20 and its members agree that it's not going to be possible to have an independent standalone country dealing with the crypto assets, and that it has to have a globally coordinated understanding on how to go about regulating crypto assets, she said in response to a question.

The way in which we are seeing this pan out during our presidency is the IMF's paper is being discussed, the FSB's Financial Stability Board paper is also taken up, and a synthesis paper will be prepared from the IMF's paper and the FSB's paper both put together, Sitharaman said.

There will be a discussion in September and October and in the end of the day we will see a roadmap being readied on how and what kind of understanding the members of the G 20 have in this, and it can be taken further forward on specific actions of regulation as and when the G 20 takes a call on it, the finance minister said.

Nirmala Sitharaman, noting that she does not want to preempt a decision, said the work done by the FSB and the IMF indicate that crypto assets, particularly those outside of central banks, are not backed by any sovereign asset, can cause macroeconomic instability.

We are in the position to see how countries are now recognising that it is not just a crypto asset regulatory issue, where countries will have to come together, but the IMF dealing with it has also brought in this time mention that they can be issues of macro economic stability itself, she said.

Today, I am very glad to have heard the European Central Bank chief Christine Lagarde speak about specific examples of how money has been routed into this operation, resulting in too many such companies that are getting involved in it raising questions of where the trail is.

It was a very substantive discussion and the agreement that all of them had was this: Yes, it has got to be globally handled, said Nirmala Sitharaman.