G20 ‘Welcomes’ Financial Stability Board’s Call for Tougher Crypto Rules

G20 ‘Welcomes’ Financial Stability Board’s Call for Tougher Crypto Rules

The intergovernmental
forum, Group of
Twenty (G20) welcomes the call made by the Financial Stability Board (FSB) for
tougher rules to guide the global cryptocurrency industry, Nirmala Sitharaman, the Finance Minister of India, said during a press conference held today (Tuesday) in India. India retains the current presidency of the G20.

Where Will G20 Stand on Crypto?

On Monday,
FSB, whose members comprise the United States, the European Union, China and
the UK, issued a regulatory
framework to guide
crypto-asset activities in the wake of the collapse of the crypto exchange, FTX
and the digital asset lender, Celsius in 2022. The framework includes enhancements
targeted at ensuring adequate protection of client assets, addressing the risks
associated with conflicts of interest, and strengthening cross-border
cooperations.

The
recommendations focus on mitigating financial stability risks and do not
exhaustively cover all specific risk categories related to crypto-asset
activities, Finance
Magnatesreported. Central bank digital currencies, viewed as digitalized central
bank liabilities, are also not subject to these recommendations.

However,
speaking on the recommendations, Sitharaman noted that the G20 during its third Finance
Ministers and Central Bank Governors Meeting held on Tuesday in Gujarat,
India, deliberated on the regulatory challenges posed by the crypto asset
ecosystem.

“Members
welcomed the high-level recommendations of the FSB on crypto asset activities
and also the global stablecoin arrangement,” Sitharaman said during the press
briefing held after the meeting.

The Indian Finance
Minister pointed out that
members of the forum discussed the country’s G20 presidency note on
cryptocurrency, without specifying what was discussed.

“Members
also discussed the presidency note that India has prepared and noted that it
will be an important input toward prioritising areas of work essential for
achieving a comprehensive, cohesive, and coordinated global policy and
regulatory frameworks,” Sitharaman added.

Different Worldview

The G20’s positive gesture to the recommendations made by the FSB was made as the Bank
for International Settlements (BIS) earlier urged the group to
dismiss digital assets, noting that they have ‘inherent structural flaws’. The BIS, which is a group encompassing the world’s major central banks,
added that there is a lack of accountability in the cryptocurrency ecosystem.

Meanwhile, recent developments across the crypto industry show that
major stakeholders across the global financial markets see digital asset
regulation in a different light. While the European Union recently passed the Markets in
Crypto-Asset (MiCA) regulation, becoming the first major jurisdiction to
introduce a comprehensive law to regulate the crypto industry, the US federal
securities regulator in recent months stepped
up its campaign against ‘unregistered’ crypto exchanges, seeking their compliance
with decades-old
securities law through the court.

On the
other hand, the UK recently sanctioned a new law that empowers
public authorities to regulate
digital assets and supervise crypto promotions. The new regulation is part of
the country’s plan to turn the country into a crypto hub.

Similarly, in Asia, Hong Kong recently rolled out new rules for its crypto
industry and has already captured the attention of 80 local and foreign digital
assets firms. Singapore, another country in the region, has stated its interest in becoming a global crypto hub.

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This article was written by Solomon Oladipupo at www.financemagnates.com.

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