G20 Nations Eye Collaboration to Regulate Crypto

The world’s 20 largest economies are considering whether they can jointly regulate cryptocurrencies.

India’s Finance Minister Nirmala Sitharaman, whose country is this year’s Group of 20 (G20) leader, told reporters on Saturday (11 February) that due to the sophisticated technologies involved in crypto, countries need to debate whether any given regulation is necessary.

“We are talking to all nations that if it requires regulation, then one country alone cannot do something,” said Sitharaman, whose comments were reported by Reuters.

“We are talking to all nations about whether we can create a standard operating procedure that is followed by everyone to create a regulatory framework, and whether it can be effective.”

India will host finance ministers and central bank governors from the G20 countries later this month, the report said.

Sitharaman’s comments came amid a number of calls for greater regulation and oversight of the crypto sector from around the world.

For example, Federal Reserve Board Governor Christopher Waller said last week that banks must approach crypto customers in the “safe and sound” way they would any other customer.

“As with any customer in any industry, a bank that engages with crypto customers will need to be very clear about the customer’s business models, risk management systems and corporate governance structures to ensure that the bank is not left in the bag if there is a crypto meltdown,” Waller said at the Global Interdependence Center – the conference on decentralized finance.

Banks considering engaging in cryptocurrency-related activities must also meet know-your-customer (KYC) and anti-money laundering (AML) requirements, he added.

In addition, the Biden administration recently laid out a roadmap for the crypto sector and urged Congress to move faster in providing new regulations for the industry.

“Congress must step up efforts,” the roadmap said, with White House officials calling on lawmakers to “expand regulators’ authority to prevent misuse of customer assets.”

Meanwhile, access to traditional banking services is becoming more difficult for crypto businesses, PYMNTS wrote last week, as upstart banks that based their business models on catering to the industry are now declining after heavy losses.

Custodia Bank, a new institution launched to specialize in digital asset payment and custody solutions for US commercial clients and not yet operational, recently had its application for membership at the US Federal Reserve rejected.

And Binance, the world’s largest cryptocurrency exchange, temporarily suspended wire transfers in US dollars last week, a move that observers speculated was linked to the exchange’s problems accessing banking services.