India Asks IMF, FSB to Prepare Technical Paper on Crypto Asset Regulation

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India, which currently holds the G20 Presidency, has asked the IMF and the Financial Stability Board (FSB) to jointly prepare a technical paper on crypto assets, which could be used to formulate a coordinated and comprehensive policy to regulate them. .

The international organizations are expected to present their joint document at the 4th meeting of finance ministers and central bank governors in October 2023, according to a statement from the Ministry of Finance.

“To complement the ongoing dialogue on the need for a policy framework, the Indian presidency has proposed a joint technical paper from the International Monetary Fund (IMF) and the FSB, which would synthesize the macroeconomic and regulatory outlook for crypto-assets. formulating a coordinated and comprehensive policy approach to crypto assets,” he said.

In their entirety, the IMF working paper, policy seminar, and joint IMF-FSB paper are expected to integrate policy issues relating to the macro-financial and regulatory outlook for crypto assets and facilitate a global consensus on a well-coordinated and comprehensive policy. approach to crypto assets, he said.

Despite the rapidly changing world of crypto, there is no comprehensive global policy framework for crypto assets. Given concerns over greater interconnection between crypto assets and the traditional financial sector, as well as the complexity and volatility of crypto assets, policymakers are calling for stricter regulation.

Global standards bodies such as Financial Action Task Force (FATF), Financial Stability Board (FSB), Committee on Payments and Market Infrastructures (CPMI), International Organization of Securities Commissions (IOSCO ) and the Basel Committee on Banking Supervision (BCBS) have coordinated the regulatory agenda, while working within their respective institutional mandates, he said.

India hopes to expand the G20 discussion on crypto assets beyond financial integrity issues and grasp the macroeconomic implications and widespread adoption of crypto in the economy, she said, adding that this will require a data-driven and knowledgeable approach to global crypto challenges and opportunities. assets, allowing G20 members to shape a coordinated and comprehensive policy response.

To inform policymakers of the broader implications of crypto assets on macroeconomic and financial stability, he said, the Indian presidency has requested the IMF to prepare a working paper on the subject for the 2nd Meeting of Finance MPs. and G20 central bank which was held in Bengaluru on 23 February 2023.

“During the said meeting, a seminar titled ‘Policy Perspectives: Debating the Path to Political Consensus on Crypto Assets’ was organized, as part of the Presidency’s efforts to broaden the dialogue around crypto assets,” said he declared.

IMF keynote speaker Tommaso Mancini-Griffoli presented the discussion paper at the event, outlining the consequences of crypto adoption on the internal and external stability of a country’s economy as well as the structure of its financial system.

Mancini-Griffoli pointed out that the purported benefits of crypto assets include cheaper and faster cross-border payments, more integrated financial markets and increased financial inclusion, but these have yet to be realized.

He further added that issues of interoperability, security and efficiency cannot be guaranteed by the private sector and that critical digital infrastructure/platforms for registries should be considered a public good.

He also pointed to global information gaps regarding the crypto asset universe and the need to better understand the linkages, opportunities and risks related to crypto assets under the G20 umbrella.

Discussions covered a wide range of topics, including the need for a common taxonomy and systematic classification of the crypto asset universe, the benefits and risks of crypto asset macroeconomic policy issues that needed to be assessed. further, as well as financial stability issues and regulatory responses.

The statement says the event helped start a broader dialogue on crypto assets, but also raises several relevant policy questions that policymakers and regulators need to weigh closely.

In addition to assessing the consequences of crypto assets on the broader economy, he said, there is also an existential question as to whether crypto assets are indeed the optimal solution to existing challenges in global financial systems. .

This story was published from a news feed with no text edits.

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