Crypto Assets can Deliver Significant Benefits to the Financial System: G20

The G20 finance ministers and central bank governors seemed to be aligned around positive regulation of crypto assets along with some caveats. In a joint communique published on the Japanese Ministry of Finance website, they have stated that technological innovations, including crypto assets, can deliver significant benefits to the financial system and the broader economy.

However, they also added that the group remains vigilant to risks around consumer and investor protection, anti-money laundering (AML) and countering the financing of terrorism (CFT). The group is also looking to adopt the FATF Interpretive Note and Guidance by the FATF at its plenary later this month.

The communique also highlights the work done by international organisations such as IOSCO and FSB on cryptocurrency regulations. The note also added:

We ask the FSB and standard setting bodies to monitor risks and consider work on additional multilateral responses as needed. We also welcome the FSB report on decentralised financial technologies, and the possible implications for financial stability, regulation and governance, and how regulators can enhance the dialogue with a wider group of stakeholders. We also continue to step up efforts to enhance cyber resilience, and welcome progress on the FSB’s initiative to identify effective practices for response to and recovery from cyber incidents.

It is encouraging that the G20 is largely positive around cryptocurrency regulations. With reports of a cryptocurrency ban looming in the background, Indian investors will hope that India will also adopt a similar progressive approach.

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