The G20 countries are said to be in line with India’s central bank’s views on the risks associated with cryptocurrencies. Reports reveal that countries are now considering institutionalizing an internationally accepted regulatory framework for crypto assets.

In April, India’s Finance Minister Nirmala Sitharaman proposed a common framework for G20 countries to regulate the sector. With India taking over the G20 presidency, cryptocurrencies have been central to the ongoing discussions.

Proposed encryption framework for G20 countries

G20 Finance Ministers and Central Bank Governors (FMCBG) attended a meeting that highlighted the macroeconomic risks and challenges associated with cryptocurrencies, according to local sources. modes.

The Reserve Bank of India has already expressed concerns in the past about the negative effects of cryptocurrencies on the larger ecosystem. According to the sources who spoke to the media, the judicial authorities will have the option to adopt stricter regulations. This will be in addition to the applicable framework in light of these risks. This, in turn, could lead to a complete ban on cryptocurrency.

Last month, the third plenary session of the Financial Action Task Force (FATF) also stressed the importance of collective action in combating illegal activities related to cryptocurrency. Meanwhile, two reports were presented at this July meeting as well.

It included reports by the Financial Stability Board (FSB) and the Bank for International Settlements (BIS).

The FSB study made recommendations, but the agency claimed that it did not fully address all categories of risks related to crypto assets. Meanwhile, the BIS report pointed to cryptocurrency’s inherent structural flaws and limited ability to benefit society.

The Indian government supports international cooperation

A person familiar with the matter stated, “Now most of them agree with the RBI’s concerns about financial and other risks associated with crypto. The 3rd G20 FMCG meeting discussed this issue in great detail,”

While it opposes the idea of ​​unilateral bans, the Indian government is said to believe that international cooperation is required to prevent regulatory arbitrage. They also stressed the global need for standards to combat money laundering and terrorist financing.

Officials expressed concern about the collapse of cryptocurrency exchanges and the possibility of them being used for illegal activities during the meeting. Meanwhile, the Financial Stability Board (FSB) and the International Monetary Fund (IMF) are apparently assessing aspects of cryptocurrency regulation and financial stability. The pair plans to submit a “synthesis paper” later this year.

The meeting took place at a time when a recent report revealed that 53.2% of cryptocurrency investors in India are seeking long-term returns. Meanwhile, the Web 3 market in India is expected to boost the country’s GDP by $5.1 billion by 2032. This is in view of the strong interest of the young Indian population in the Web 3 sector.