G20 Finance Meet In Marrakesh: Crypto Regulatory Framework Expected To Be On The Cards

The IMF and FSB joint synthesis paper, released on September 7, emphasised the complexity of implementing an outright ban on crypto assets.

Finance Minister Nirmala Sitharaman took the helm in a recent meeting with MDB heads.

Source : Twitter/@FinMinIndia

Anticipated discussions at the upcoming G20 finance ministers and central bank governors meeting in Marrakesh this week will likely centre around unveiling a regulatory framework for crypto assets and reforming multilateral development banks (MDBs). In a prior meeting held in September, G20 leaders gathered in New Delhi and endorsed recommendations presented by the Financial Stability Board (FSB), a global risk monitoring body, on the supervision and integration of crypto assets within financial systems.

Indian officials have carefully assessed these FSB and International Monetary Fund (IMF) recommendations and analysed India's stance in alignment with the collective agreement reached during the G20 leaders' meeting, as confirmed by a senior government official, reported Mint. “India will put forward its position keeping its interests in mind," the individual noted, highlighting the unique risks faced by emerging market economies like India, as acknowledged in the FSB synthesis paper.

The IMF and FSB joint synthesis paper, released on September 7, emphasised the complexity of implementing an outright ban on crypto assets. It also underscored concerns that a surge in crypto asset adoption could potentially disrupt monetary policy transmission. Conversely, the Reserve Bank of India (RBI) has raised alarm regarding the burgeoning demand for cryptocurrencies and has advocated for a complete prohibition of digital currencies.

In addition to crypto asset regulations, the report added that the G20 finance ministers and central bank governors will deliberate on proposed reforms outlined in the second part of the NK Singh and Lawrence Summers panel report, set to be released before the meeting scheduled on October 12-13.

The forthcoming report instalment will delve into various reform suggestions, elaborate on operational reforms, address response agility, and explore private capital mobilisation, including considerations for expanding the Multilateral Investment Guarantee Agency (MIGA). Moreover, it will propose a new mechanism for foreign currency hedging. The first segment of the report, released in July, advocated for a substantial increase in MDBs' annual spending by $3 trillion by 2030, channelling $1.8 trillion towards intensified climate action and $1.2 trillion for the attainment of other sustainable development goals (SDGs).

Finance Minister Nirmala Sitharaman took the helm in a recent meeting with MDB heads and NK Singh, the co-convener of the G20 independent expert group, to discuss these pivotal matters.

"According to the IMF and FSB recommendations, one of the highlights is to call for swift implementation of Crypto Assets Regulatory Framework (CARF). This framework, akin to the Common Reporting Standard (CRS), will standardise the reporting of tax-related information, particularly concerning transactions involving cryptocurrency assets," Edul Patel, CEO of crypto investing platform Mudrex, told ABP Live. "This FMCBG meeting reflects India’s commitment to tackle crypto challenges and opportunities and gives clarity around regulations which will help crypto service providers and users in India and globally for better adoption. This high-level meeting of the topmost financial bureaucrats has the potential to instil a widespread adoption of blockchain technology. It can also protect the interest of millions of retail investors that have so far been overwhelmed by the lack of regulatory guidelines."

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