Home » Cryptocurrency » India backs FSB-IMF-FATF Global “Crypto” Framework according to G20 

India backs FSB-IMF-FATF Global “Crypto” Framework according to G20 

Delhi, India  

People acquainted with the development say that the majority of G20 members now agree that cryptocurrencies could pose serious hazards to the integrity of the financial system. This opinion is supported by India’s central bank. These countries might collaborate to establish a globally recognized regulatory framework for crypto assets while permitting individual jurisdictions to enact even harsher laws or outright bans above that minimal level.

August 5, 2023 at 3:00 pm

Updated August 5, 2023 at 3:00 pm


The third meeting of the G20 Finance Ministers and Central Bank Governors (FMCBG) took place last week in Gandhinagar, and according to some people with direct knowledge of the situation who asked to remain anonymous, some countries’ initial enthusiasm for cryptocurrencies has now subsided as most of them have realized the macroeconomic risks and other challenges associated with them.


According to one of them, “Many countries are also concerned about the risks of cryptos being used for drug trafficking, funding terrorism, and money laundering, as well as the recent collapse of crypto exchanges.” The failure of FTX, the second-largest cryptocurrency exchange in the world, in November 2022 had an effect on more than 1 million investors.   


According to a second person, experts will accurately evaluate the financial and macroeconomic risks linked with cryptocurrencies and offer suggestions on how to manage them before the G20 finally takes the problem into consideration. Later this year, the International Monetary Fund (IMF) and the Financial Stability Board (FSB) will produce a “synthesis paper” on this subject after studying crypto-related issues. The synthesis approach will focus on two main issues: crypto legislation and financial stability.


The issue was raised in the conclusion and chair summary of the third G20 FMCBG meeting on July 18: “We look forward to receiving the IMF-FSB Synthesis Paper, including a Roadmap, before the Leaders’ Summit in September 2023 to support a coordinated and thorough policy and regulatory framework taking into account the full range of risks, risks specific to the emerging market and developing economies (EMDEs), and ongoing global implementation of FATF standards.”


The two most recent assessments on cryptocurrencies that were presented to the G20

FMCBG at its meeting in July—one by the FSB and the other by the Bank for International Settlements (BIS)—according to the people—underlined the necessity of developing a strong regulatory framework that would also address macroeconomic threats.


The BIS research “The Crypto Ecosystem: Key Elements and Risks,” which examines important features of the cryptocurrency ecosystem, evaluates its structural problems, and identifies vulnerabilities it poses, was also praised by the G20 FMCBG. According to the study’s findings, “crypto has so far failed to harness innovation to the benefit of society” and “crypto’s inherent structural flaws make it unsuitable to play a significant role in the monetary system”

Crypto does not finance actual economic activity and continues to be mostly selfreferential. It has innate problems with responsibility, integrity, and stability as well as efficiency and effectiveness. Rather than being caused by technological limits, these structural problems are a result of the economics of incentives at play, according to the BIS analysis.

The Reserve Bank of India (RBI) has already expressed its worries about how cryptocurrencies will affect the Indian economy negatively, but the Union government believes that because cryptocurrencies are global in nature, any unilateral ban or regulation will be ineffective and that international cooperation is required to prevent regulatory arbitrage.



Remember, investing in cryptocurrencies involves risks, and it’s important to conduct thorough research and seek professional advice before making any financial decisions.


(Please keep in mind that this post is solely for informative purposes and should not be construed as financial or investment advice.)

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