Panel talks in G20 meeting: India requests IMF for discussion paper on crypto assets

To inform policymakers on the broader macroeconomic and financial stability implications of crypto assets, the Indian Presidency requested the International Monetary Fund (IMF) to prepare a discussion paper on the topic for the Second G20 Finance and Central Bank Deputies Meeting held in Bengaluru recently.

During the panel discussion on crypto -- Policy Perspective: Debating the road to policy consensus on crypto assets, there were various subjects such as complexity, volatility, security, and stability that came up, regarding cryptocurrencies and assets, according to a statement released on Saturday by the ministry of finance.

Despite the rapid evolution of the crypto universe, there is no comprehensive global policy framework for crypto assets, it was observed during the panel discussion.

Given the concerns over greater interconnectedness between crypto assets and the traditional financial sector as well as the complexity and volatility around crypto assets, policymakers are calling for tighter regulation.

India's G20 Presidency grounded in the theme -- Vasudhaiva Kutumbakam", or "One Earth, One Family, One Future", underlines the message of equitable growth and a shared future for all, according to the statement from the ministry of finance.

Digital technology is playing an important role in achieving this goal, by transforming the financial sector, boosting financial inclusion, and improving financial market efficiency. The Indian Presidency's priority on the financial sector regulatory reforms in 2023 is to make the digital financial system more efficient, secure, and stable, the statement said.

The global standard-setting bodies, such as the Financial Action Task Force (FATF), Financial Stability Board (FSB), Committee on Payments and Market Infrastructures (CPMI), International Organization of Securities Commissions (IOSCO), and Basel Committee on Banking Supervision (BCBS) have been coordinating the regulatory agenda, while working within their respective institutional mandates, according to the finance ministry statement.

India hopes to broaden the G20 discussion on crypto assets beyond financial integrity concerns and capture the macroeconomic implications and widespread crypto adoption in the economy. This will require a data-based and informed approach to the global challenges and opportunities of crypto assets, allowing G20 members to shape a coordinated and comprehensive policy response, according to the panel discussion.

During the said meeting, a seminar -- Policy Perspectives: Debating the Road to Policy Consensus on Crypto Assets -- was held, as part of the Presidency's efforts to broaden the dialogue around crypto assets.

The IMF speaker, Tommaso Mancini-Griffoli, presented the discussion paper during the event, highlighting the consequences of crypto adoption on the internal and external stability of a country's economy as well as on the structure of its financial system, according to the statement from the ministry.

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

He further added that problems with interoperability, safety, and efficiency cannot be guaranteed by the private sector and critical digital infrastructure/platforms for ledgers should be viewed as a public good. He also flagged the global information gaps pertaining to the crypto asset universe and the need to build a deeper understanding of the interlinkages, opportunities, and risks pertaining to crypto assets under the aegis of the G20.

The seminar was attended by Deputies from G20 member countries, international organizations as well as eminent experts on the subject.

( With inputs from ANI )

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