G20 Finance Chiefs Recognize Crypto Risks
• India’s central bank governor reportedly said that the G20 finance ministers and central bank governors recognize that cryptocurrencies pose major risks to financial stability, monetary systems, and cyber security.
• The Indian government asked the International Monetary Fund (IMF) and the Financial Stability Board (FSB) to produce a joint paper on crypto in order to formulate comprehensive crypto policies.
• U.S. Treasury Secretary Janet Yellen said that the U.S. has not suggested an outright ban of crypto activities but stressed that it is „critical“ to establish a strong regulatory framework for crypto.
Major Financial Stability Risks
The G20 finance ministers and central bank governors recognize that cryptocurrencies pose major risks to financial stability, monetary systems, and cyber security, India’s central bank governor reportedly said. Crypto regulation was among the key topics discussed during the G20 meeting over the weekend.
Reserve Bank of India (RBI) Governor Shaktikanta Das talked about cryptocurrency during a media briefing Saturday following the G20 meeting of finance ministers and central bank governors in Bengaluru. According to India’s state-owned media agency News On Air: Das told the media that there is now wide recognition and acceptance of the fact that crypto currencies or assets are major risks to financial stability, monetary systems, and cyber security.
Pilots for Central Bank Digital Currency
Das also noted that G20 delegates expressed interest in central bank digital currency (CBDC) pilot projects in India and other countries, the publication conveyed. India’s central bank began its digital rupee pilots in November and December last year. During a media briefing at the conclusion of the G20 meeting of finance ministers and central bank governors, Indian Finance Minister Nirmala Sitharaman said there is almost a clear understanding that anything not backed by the central bank is not a currency. She emphasized that this is the position that India has taken for a very long time.
Joint Paper on Crypto
During the G20 meeting, India asked the International Monetary Fund (IMF) and the Financial Stability Board (FSB) to produce a joint paper on crypto to help formulate „comprehensive“ crypto policies. IMF Managing Director Kristalina Georgieva has called for more crypto regulation, stressing that banning should not be taken off the table. Moreover, IMF executive board recently published guidance for developing effective crypto policies as well as outlining their stance against cryptocurrency activities which are not backed by any respective country’s Central Bank or Government’s regulations .
Banning or Regulating Cryptocurrency Activities
The RBI has said repeatedly that cryptocurrencies which are not backed by banks should be banned entirely however; Indian Finance Minister Nirmala Sitharaman previously said banning or regulating will only be effective if it is done with collaboration from other countries too . US Treasury Secretary Janet Yellen also highlighted importance of establishing strong regulatory framework regarding cryptocurrency activities instead of outright banning them .
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