• The G20 Finance Ministers and Central Bank Governors (FMCBG) Meeting concluded with a commitment to regulations for the cryptocurrency sector.
• The International Monetary Fund (IMF), Bank for International Settlements (BIS), and Financial Stability Board (FSB) have been tasked to come up with recommendations and a roadmap for regulating the cryptocurrency sector.
• Klaas Knot, Chairman of FSB, sent a letter to the G20 meeting in which he mentioned that the FSB was preparing recommendations for regulating cryptocurrency and decentralized finance.
G20 Meeting of Financial Chiefs
The G20 Finance Ministers and Central Bank Governors (FMCBG) met on February 24-25 in Bengaluru, India, concluding with a strong commitment to regulations for the cryptocurrency sector. Representatives from the International Monetary Fund (IMF), Bank for International Settlements (BIS), and Financial Stability Board (FSB) were also present at the event.
Regulations Needed
The need for regulation is being felt across the crypto spectrum after the series of collapses and bankruptcies since May 2022. The Chair’s Summary and Outcome Document stated that there was a need for an IMF-FSB Synthesis Paper supporting “a coordinated and comprehensive policy approach to crypto-assets” including all risks posed by crypto assets.
Task Assigned To IMF, BIS & FSB
The IMF, BIS, and FSB have been tasked with coming up with recommendations and a roadmap for regulating the cryptocurrency sector. Klaas Knot, Chairman of FSB, also sent a letter to the G20 meeting stating that they were preparing recommendations regarding regulation, supervision, and oversight of cryptocurrencies.
G20 Commitment
The document issued by G20 also committed them to “maintain open dialogue among regulators” while working towards developing global standards on digital asset exchanges as well as taxation policies related to cryptocurrencies. It further encouraged international organizations such as FATF; OECD; UNCTAD; World Bank Group; WTO; IAIS; IOSCO; CGFS; BCBS; CPMI etc., along with relevant national authorities to work together in creating these standards.
Conclusion
Overall this meeting was productive in terms of getting concrete steps towards creating regulations around cryptocurrencies globally– something that many stakeholders have been demanding over recent years. There will be further developments in this area over next few months as different organizations start working on their respective tasks assigned during this meeting.