Developing Global Crypto Regulation Is a Priority for G20 Under India’s Presidency – Regulation Bitcoin News

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The Reserve Bank of India (RBI) says one of the pri­or­i­ties for the G20 under India’s pres­i­den­cy is to “devel­op a frame­work for glob­al reg­u­la­tion, includ­ing the pos­si­bil­i­ty of pro­hi­bi­tion, of unbacked cryp­to assets, sta­ble­coins, and defi.” The Indi­an cen­tral bank warned that “tur­moil in cryp­to assets mar­ket” is among “the major risks that can poten­tial­ly under­mine glob­al finan­cial stability.”

Indian Central Bank on Crypto Regulation

India’s cen­tral bank, the Reserve Bank of India (RBI), released its Finan­cial Sta­bil­i­ty Report (FSR) for Decem­ber on Thurs­day. The 172-page report includes dis­cus­sions on cryp­to assets, cen­tral bank dig­i­tal cur­ren­cies (CBD­Cs), and decen­tral­ized finance (defi).

“Reg­u­lat­ing new tech­nol­o­gy and busi­ness mod­els after they have grown to a sys­temic lev­el is chal­leng­ing,” the RBI report states. “To pro­mote respon­si­ble inno­va­tion and to mit­i­gate finan­cial sta­bil­i­ty risks in cryp­to ecosys­tem, it is vital for pol­i­cy­mak­ers to design an appro­pri­ate pol­i­cy approach.” The Indi­an cen­tral bank continued:

In this con­text, under India’s G20 pres­i­den­cy, one of the pri­or­i­ties is to devel­op a frame­work for glob­al reg­u­la­tion, includ­ing the pos­si­bil­i­ty of pro­hi­bi­tion, of unbacked cryp­to assets, sta­ble­coins, and defi.

The cen­tral bank named “tur­moil in cryp­to assets mar­ket” one of “the major risks that can poten­tial­ly under­mine glob­al finan­cial sta­bil­i­ty.” The RBI also said cryp­to assets are high­ly volatile, “exhib­it high cor­re­la­tions with equi­ties,” and have fall­en as infla­tion rose.

The report fur­ther notes that the col­lapse of cryp­to exchange FTX and sub­se­quent cryp­to mar­ket sell-offs “have high­light­ed the inher­ent vul­ner­a­bil­i­ties in the cryp­to ecosys­tem.” It also high­lights the terra/luna melt­down in May and the bank­rupt­cy fil­ings of sev­er­al major cryp­to firms, includ­ing cryp­to hedge fund Three Arrows Cap­i­tal (3AC) and cryp­to lender Cel­sius Network.

G20 Members to Discuss Crypto Regulation

Ajay Seth, India’s eco­nom­ic affairs sec­re­tary, said ear­li­er this month that the G20 mem­bers aim to build a pol­i­cy con­sen­sus on cryp­to assets for bet­ter glob­al reg­u­la­tion. Indi­an Finance Min­is­ter Nir­mala Sithara­man said in Octo­ber that cryp­to will be part of India’s agen­da dur­ing its G20 pres­i­den­cy, adding that she hopes a tech­nol­o­gy-dri­ven reg­u­la­tion frame­work for cryp­to assets will be established.

The mem­bers of the Group of 20 (G20) are Argenti­na, Aus­tralia, Brazil, Cana­da, Chi­na, France, Ger­many, India, Indone­sia, Italy, Japan, the Repub­lic of Korea, Mex­i­co, Rus­sia, Sau­di Ara­bia, South Africa, Turkey, the U.K., the U.S., and the Euro­pean Union. The group rep­re­sents around 85% of the world’s GDP.

India’s cen­tral bank, how­ev­er, has repeat­ed­ly rec­om­mend­ed ban­ning all non-state-issued cryp­tocur­ren­cies, includ­ing bit­coin and ether. Last week, RBI Gov­er­nor Shak­tikan­ta Das warned that cryp­tocur­ren­cies will cause the next finan­cial cri­sis if they are not banned. How­ev­er, India’s finance min­is­ter said in July that both ban­ning and reg­u­lat­ing cryp­to can only be effec­tive with sig­nif­i­cant inter­na­tion­al col­lab­o­ra­tion.

Do you think the G20 will devel­op glob­al reg­u­la­tion that ben­e­fits the cryp­to indus­try? Let us know in the com­ments sec­tion below.

Kevin Helms 

A stu­dent of Aus­tri­an Eco­nom­ics, Kevin found Bit­coin in 2011 and has been an evan­ge­list ever since. His inter­ests lie in Bit­coin secu­ri­ty, open-source sys­tems, net­work effects and the inter­sec­tion between eco­nom­ics and cryptography.




Image Cred­its: Shut­ter­stock, Pix­abay, Wiki Commons

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