G20 Crypto Regulation: FMCBGs Adopt IMF-FSB's Proposed Roadmap, Favouring Oversight Over Outright Ban

The Synthesis Paper stressed the need for comprehensive regulatory and supervisory oversight of crypto-assets, opposing a blanket ban to mitigate risks to macroeconomic and financial stability.

The IMF-FSB paper also advocated employing anti-money laundering norms to curb the illicit use of crypto-assets for criminal and terrorist activities.

Finance Ministers and Central Bank Governors (FMCBGs) from G20 nations, presiding under India’s helm, have endorsed the proposed roadmap for crypto regulation by the International Monetary Fund (IMF) and Financial Stability Board (FSB). The roadmap diverges from advocating an outright ban on crypto-assets, instead favouring a thorough regulatory and supervisory oversight approach as a more viable solution.

During the final meeting of the FMCBGs under India's Presidency on October 12-13, held in Marrakesh, Morocco in conjunction with the IMF/WB Annual Meetings, the G20 Finance Ministers and Central Bank Governors Communique was unanimously adopted, according to a statement from the Finance Ministry.

Regarding the adoption of the G20 Roadmap on Crypto Assets, outlined in the Synthesis Paper, the communique emphasised, "A detailed and action-oriented roadmap is crucial to achieve our shared objectives of macroeconomic and financial stability and to ensure effective, adaptable, and unified implementation of the comprehensive policy framework for crypto assets. We urge for prompt and unified execution of the G20 Roadmap, encompassing policy framework implementations, outreach beyond G20 jurisdictions, global coordination, cooperation, information sharing, and addressing data deficiencies."

The statement further urged swift and unified implementation of the G20 Roadmap, encompassing policy framework implementations, outreach beyond G20 jurisdictions, global coordination, cooperation, information sharing, and addressing data deficiencies.

"We call upon the IMF and FSB to provide regular and structured updates on the progress of the G20 Roadmap on Crypto Assets. We endorse the ongoing efforts and worldwide implementation of FATF standards on crypto-assets," it added.

The Synthesis Paper stressed the need for comprehensive regulatory and supervisory oversight of crypto-assets, opposing a blanket ban to mitigate risks to macroeconomic and financial stability.

The paper also advocated employing anti-money laundering norms to curb the illicit use of crypto-assets for criminal and terrorist activities. In addressing risks to financial integrity and minimising misuse of crypto-assets for criminal and terrorist activities, the paper suggested that jurisdictions should adhere to the Financial Action Task Force (FATF) anti-money laundering and counter-terrorist financing (AML/CFT) standards applicable to virtual assets (VAs) and virtual asset service providers (VASPs).

"Jurisdictions should identify and evaluate the money laundering and terrorist financing (ML/TF) risks linked to VAs and take appropriate measures to manage and mitigate those risks," it advised.

Furthermore, the paper called for specific jurisdictions, particularly emerging economies, to undertake additional measures to mitigate particular risks. These jurisdictions may tailor these targeted measures to suit their unique circumstances, particularly if they face heightened macro-financial risks associated with crypto-assets.

Factors such as the size of the economy and financial system, regulatory priorities, institutional quality and capacity, and level of financial integration into the global economy may influence jurisdictional characteristics determining vulnerabilities to macro-financial risks from crypto-assets.

"The implementation of these measures may vary across countries based on their unique circumstances and capacity limitations," the paper noted.

Reacting to the adoption, Mudrex CEO Edul Patel told ABP Live, "The adoption of the G20 Roadmap on crypto assets by the FMCBGs represents a progressive stride in fostering international collaboration for the regulation of crypto assets. This comprehensive roadmap can guide and shape global policy, evolve risk-mitigation strategies, and establish adaptable regulations for the dynamic crypto market. It emphasizes addressing the distinct challenges encountered by Emerging Markets and Developing Economies, reflecting a forward-looking approach to a rapidly evolving financial landscape."

"The adoption of the G20 roadmap on crypto-assets at the 4th meeting of Finance Ministers and Central Bank Governors held under India’s G20 Presidency is a welcome move," said Ashish Singhal, Co-Founder and CEO, CoinSwitch. "This is a detailed and action-oriented roadmap that will help coordinate global policy as well as develop mitigating strategies and regulations on crypto assets. Having an effective, flexible, and coordinated road map for the implementation of policy framework for crypto assets is essential."

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