The G20 (20 countries and territories) welcomed the Financial Stability Board (FSB) high-level recommendations on cryptocurrency activities and global stablecoin arrangements. Finance Minister Nirmala Sitharaman of India, which holds the presidency, made the announcement at a press conference on Wednesday after the third meeting of finance ministers and central bank governors, which was held for several days in the eastern part of the country.
The Financial Stability Board (FSB) issued a recommendation on Tuesday calling for stronger rules to protect client assets and avoid conflicts of interest after a spate of suspected fraud over the past year. The recommendation comes after a consultation, in which firms such as cryptocurrency exchanges Binance and Coinbase sounded the alarm that stricter rules could limit innovation, while traditional financial firms pushed for stronger controls over crypto assets.
Stablecoin monitoring welcome
CoinDesk had previously reported that there was disagreement between the G7 and the G20 on stablecoin regulation, but Sitharaman said the G20 welcomed the FSB’s recommendations on oversight of stablecoins.
According to Finance Minister Sitharaman, the Indian Presidency Memorandum of Understanding on Crypto Assets was also presented during discussions that lasted late into the night of the 17th. It’s unclear what exactly the memorandum contained, but local reports said it was expected to bring together efforts made by various countries and institutions.
“Members also discussed the Presidency Memorandum of Understanding prepared by India, noting that the Memorandum of Understanding will be an important input towards prioritizing the work areas essential to achieving a comprehensive, coherent and coordinated global policy and regulatory framework,” said Finance Minister Sitharaman.
Final decision on G20 position in September
In addition to the FSB’s recommendations, the G20 will present a joint FSB-International Monetary Fund (IMF) document in September that will focus on the global macro impact of crypto-assets. At that time, the G20 position on crypto-assets during India’s presidency will be finalized.
Central Bank of India Governor Shaktikanta Das said the Bank for International Settlements (BIS) January 2023 document, which included a ban on crypto assets in addition to regulation as a policy option, reflected the “huge risks” of crypto assets, which he said was “what we have been saying” for years.
Das also referred to the G20 discussion on Central Bank Digital Currencies (CBDC). He said there had been a clear shift in thinking and that “CBDC is an important aspect that needs to be considered more seriously.”
“We also recognize that CBDC has great potential to facilitate easier, smoother and seamless cross-border transactions and cross-border payments, and we need to move this agenda forward,” Das said, adding that a digital version of fiat currency “represents a fundamental change in the monetary system.”
Central banks around the world are studying the issue, and a recent study by the Bank for International Settlements found that around 15 retail CBDCs are likely to be in circulation by 2030.
｜Editing: Rinan Hayashi
｜Original: G20 Nations Welcome FSB’s Tougher Crypto Rules, Says Presidency Holder India