A senior government official emphasized, "The G20 Leaders have expressed their support for the IMF-FSB Synthesis paper. We expect more in-depth discussions on the expeditious implementation of regulations. The groundwork has been laid, and we can proceed from here."
Moreover, the official highlighted that these discussions should extend beyond the G20 to include other countries and should be followed by internal dialogues within India itself.
The official clarified that the government does not view the issue as a binary choice between an outright ban and unrestricted use of cryptocurrencies. Instead, there is a set of recommendations to consider. While individual countries retain the option to ban cryptocurrencies, the success of such bans would depend on the consensus among other nations. Thus, discussions will primarily focus on formulating regulations for cryptocurrencies and determining the extent of their implementation.
In the Delhi declaration, the G20 stated its commitment to closely monitor the rapidly evolving developments in the crypto asset ecosystem. The G20 endorsed the Financial Stability Board's (FSB) high-level recommendations for the regulation, supervision, and oversight of crypto-assets activities and markets, as well as global stable coin arrangements.
The G20 also welcomed the IMF-FSB Synthesis Paper, including a comprehensive roadmap aimed at facilitating a coordinated policy and regulatory framework. This framework will consider a wide range of risks, including those specific to emerging market and developing economies (EMDEs). The ongoing global implementation of FATF (Financial Action Task Force) standards to combat money laundering and terrorism financing risks was also acknowledged.
Further discussions on cryptocurrency regulation are expected at the fourth meeting of G20 finance ministers and central bank governors, scheduled during the 2023 annual meetings of the World Bank and the IMF in Marrakech, Morocco, from October 9-15.
The IMF-FSB Synthesis paper strongly advocates for cryptocurrency regulation while cautioning against a blanket ban, highlighting its potential ineffectiveness.
India has consistently advocated for a global approach to regulating cryptocurrencies, citing concerns related to money laundering, tax evasion, and potential impacts on financial systems.
The official also emphasized the inherent risks associated with cryptocurrencies, particularly the absence of separate depository and clearing systems, which differ from traditional stock markets. He stated, "The purpose of regulation is to effectively manage these risks. Any country that believes it faces higher risks can implement more restrictive regulations. If all countries agree on a common regulatory framework, it would eliminate arbitrage opportunities."