Individual legislative reforms will not solve the problem of cryptocurrency risks. Therefore, this requires coordinated action by all countries, said Minister of Finance of India Nirmala Sitharaman.
India, which holds the G20 presidency, intends to develop a common regulatory framework for all countries to combat cryptocurrency risks. This was announced by Minister of Finance of India Nirmala Sitharaman, according to The Indian Express.
Speaking at the Peterson Institute for International Economics (PIIE) in Washington. She noted that the multiple upheavals in the digital asset ecosystem have severely affected investors around the world. And piecemeal legislative reforms won’t 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 the 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 the heads of central banks and finance ministries of the G20 countries. However, multiple bankruptcies, hacks and collapses of cryptocurrencies in 2022 have increased regulators’ attention to the industry.
In 2018, G20 finance heads discussed the situation with cryptocurrencies and concluded that, despite the obvious risks. But they did not pose a threat to global financial stability at the time. But all participants of the meeting were in favor of continuing to monitor the situation at that time. And many of them supported the need to develop common regulatory principles.
Financial Stability Board (FSB)
Our experts note that at the same time, the Financial Stability Board (FSB). Which oversees and develops legal measures in the area of financial policy of the G20. It rejected several states’ request 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. The only document that covers several states. That is the bill Markets in Crypto-Assets (MiCA), relating to the regulation of cryptocurrencies in the EU. The provisions of this document will not come into force until early 2024.
Last December, the then FSB Secretary General Dietrich Domanski told the Financial Times in an interview. That the organization would introduce global regulations for cryptocurrencies in early 2023 and “put them into effect quickly.”
According to a program of publications on the FSB website, the final recommendations for regulating Stablecoin. As well as other crypto-assets will appear in July of this year.