G20 Agrees On Implementing Global Crypto Standards
Members of the G20 Summit have reached an agreement in New Delhi to implement common framework for regulating crypto assets.
India has etched its name into history books after member nations of the intergovernmental G20 forum reached an agreement at the New Delhi Summit to develop a global standard framework for regulating cryptocurrencies.
Ministerial and working groups will hold discussions surrounding a unified regulatory approach toward crypto assets at the G20 Leaders’ Summit, which is scheduled to be held from September 9 - 10 in New Delhi - India’s capital city.
The group decided to bring digital currencies under the oversight of their respective standard-setting bodies (SSBs) in light of the asset class’s macroeconomic implications.
G20’s Discussions Regarding Global Crypto Regulations To Touch Upon The IMF’s Policy Recommendations
Prior to the meeting, the Financial Stability Board (FSB) and the International Monetary (IMF) circulated a synthesis paper to the member nations with proposals on how to regulate cryptocurrencies within their jurisdictions, the contents of which will be the focal point of Saturday’s discussions.
The IMF-FSB Synthesis Paper will consider a wide range of risks involved with cryptocurrencies, specifically focusing on their impact on emerging markets and developing economies (EMDEs). The policy and regulatory framework will also address the global implementation of Financial Action Task Force (FATF) standards to fight against money laundering and terrorism financing risks involving blockchain-based digital currencies.
Governments have been urging their standard-setting bodies (SSBs) to timely and effectively implement the FSB’s policy recommendations on an international scale to prevent any regulatory arbitrage.
The FSB was appointed by the G20 to coordinate the creation of an effective strategy for regulating crypto assets.
Prime Minister Modi Advises Counterparts To Embrace Rather Than Dismiss Crypto And AI Technologies
Speaking at the B20 Summit India 2023 - a dialogue forum involving the global business community - held last month, Indian Prime Minister Narendra Modi emphasized the need for an international framework for cryptocurrencies and the ethical implementation of artificial intelligence (AI).
Modi also highlighted India’s initiative to establish a global Green Credit framework and urged industry leaders to adopt environmentally friendly business practices.
While addressing the summit, he noted that there exists a challenge for governments and industry leaders to adopt a more comprehensive approach towards cryptocurrencies. The PM said he expects the G20 to take the initiative and design a global framework for digital currencies in which “all stakeholders are taken care of”.
Modi also advocated for a cooperative and coordinated approach towards cryptocurrencies, advising global leaders to recognize the inevitability of swift technological advancements and adopt rather than resist or dismiss them.
Throughout its G20 Presidency, India conducted numerous cryptocurrency-related seminars and forums to help industry newcomers better understand the highly volatile asset class. The country’s efforts to instigate conversations surrounding crypto helped evaluate its impact on emerging markets and economies.
Likewise, Modi also advocated for an integrated approach to the ethical usage of artificial intelligence (AI) programs. While recognizing both the excitement surrounding the technology and concerns related to algorithm bias and their impact on society, the PM stressed that such issues could only solved if the business community and governments reached a common consensus.
G20 Approves $200 Billion In Additional Funding For Low And Middle-Income Economies
Meanwhile, several sources report that G20 working groups have made recommendations to reform and strengthen Multilateral Development Banks (MDBs) by introducing a Capital Adequacy Framework (CAF) to address global challenges while providing additional funding capacity for low and middle-income countries that face financial and economic uncertainties.
According to new reports coming out of Delhi, MBDs are keen to implement the updated CAF recommendations. Also, the G20 has reached a consensus to provide additional funding of $200 billion to meet the financing needs of struggling economies over the course of the next 10 years.
The CAF is based on the mandate agreed upon by G20 leaders at the summit in Bali last year, whose implementation could be a milestone for India during its G20 Presidency.
India, which co-chairs the G20’s Financial Inclusion Action Plan, is set to propose a three-year policy guideline to undertake international financial inclusion initiatives from 2024 until 2026.
Under the Indian Presidency, the G20 was able to make progress in managing global debt vulnerability, which has been a key focus for the country.
Zambia, Ghana, and Ethiopia have addressed concerns about their debt crisis under the common framework, while the debt restructuring procedure for Sri Lanka is being conducted outside the framework.
The G20 comprises 19 countries plus the European Union (EU), which together account for two-thirds of the world population, over 80% of the global GDP, and 75% of international trade.
India assumed its Presidency in December 2022 and has since organized and held 200 meetings in 60 cities across the nation. At the conclusion of the New Delhi Summit, the member nations will adopt a G20 Leaders’ Declaration, stating their commitment to the points discussed and agreed upon during the respective meetings.