G20 meeting of finance chiefs likely to discuss common approach to crypto regulations: Report
The first meeting of G20 finance ministers and central bank governors under India’s presidency, which takes place from February 23 to 25 in Bengaluru, is expected to discuss cryptocurrencies, among other things, Reuters said in a report.
Indian Finance Minister Nirmala Sitharaman, who plays host, previously said the group is exploring whether it can collectively regulate cryptocurrencies.
Pitch for joint regulations
“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,” Reuters quoted her as saying in a Feb. 11 report.
She argued that given the sophisticated technologies involved, the G20 is exploring the possibility of putting in place a common regulatory framework for cryptocurrencies that all nations can follow.
Facing immense pressure from 115 million strong crypto investors on the one hand and the regulators unwilling to accommodate digital assets in the financial system on the other, the Indian government has often spoken about the need for a global and coordinated approach to such rules.
Regulatory interventions
Over the past few weeks, crypto regulations have become a hot topic, with US regulators taking a tough stance against some of the services offered by leading companies.
For example, veteran crypto exchange Kraken was forced to stop betting services for US investors and pay $30 million in a settlement. In another case, the issuer of BUSD, the third largest stablecoin with $16 billion in outstanding, was forced to suspend operations by the New York Department of Financial Services (NYDFS). Both are charged with offering unregistered securities.
Moreover, the US Securities and Exchange Commission (SEC), which has filed a separate lawsuit against BUSD’s issuer Paxos, has warned other crypto companies of similar measures if they are found to be violating existing laws. However, many believe that in the absence of clear rules, the SEC may indulge in regulatory overreach.
To catch up with the regulations
In contrast, the European Union approved the Markets in Crypto Assets (MiCA) Regulation in October 2022. The exhaustive nature of regulations under MiCA, which have not entered into force yet, allows crypto asset service providers (CASPs) to adapt and comply with the requirements before they become mandatory.
Both the US and the EU are members of the G20. Given this, a discussion on crypto regulation at the upcoming meeting between finance ministers and central bank governors will be interesting to watch out for.
