- Under the G20 Presidency, India has proposed a roadmap to creating a global regulatory framework for cryptocurrencies.
- This framework aims to standardize policies across countries, focusing on financial integrity and stability, and includes action points for monitoring and regulating crypto-related risks.
India’s tenure as the G20 President is already making waves in the cryptocurrency sector. The country has proposed a novel approach for implementing a unified global regulatory framework for digital assets, emphasizing the need for harmonized international standards to effectively address the associated risks.
Setting the Stage for a Global Crypto Regulatory Framework
India’s influence on the world’s leading economies, encapsulated in the G20, is being leveraged to foster a cohesive, coordinated global policy for crypto assets. The Presidency Note, released on August 1st, details the country’s approach towards setting this stage.
India acknowledges the extensive work done by intergovernmental organizations in laying down regulatory standards for the crypto industry. However, the note asserts the necessity for increased synchronization to ensure uniform implementation of these regulations across different jurisdictions.
This note forms the bedrock for the Synthesis Paper, a document slated for release by the International Monetary Fund (IMF) and the Financial Stability Board (FSB) by the end of August. The paper aims to provide an extensive review of crypto-related risks and propose a “Roadmap on Establishing a Global Framework for Crypto Assets,” which the G20 will consider adopting.
The Objective: Safeguarding Macro-Financial Stability
The crux of India’s proposal is to help countries establish an agreed minimum policy standard for crypto assets. The ultimate goal is to ensure macroeconomic, financial stability and integrity across nations. It goes on to suggest that while these standards serve as the baseline, countries can opt to adopt even stricter regulations based on their internal requirements.
The framework presented by India includes several “action points,” which are suggested to be incorporated into the roadmap proposed by the IMF and the FSB. These action points encompass building outreach across all jurisdictions to foster capacity for implementation, oversight, and enforcement of standards. India’s framework puts an initial focus on regions with high crypto adoption and where globally active crypto exchanges and large stablecoin issuers are located.
India’s proposal also calls for continued monitoring of financial stability risks posed by crypto assets, stressing the importance of cross-border information sharing and consumer protection. Moreover, the country suggests promoting a more effective implementation of Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT) standards across jurisdictions, encouraging a risk-based approach.
The Presidency Note additionally highlights the need for a framework to provide technical assistance and guidance to regulators and institutions, with the aim of consistently monitoring the implementation of recommended standards in each jurisdiction. These comprehensive efforts demonstrate India’s proactive stance in shaping the future of global crypto regulation.