FameEX Hot Topics | G20 Leaders Embrace FSB's Crypto Regulation Recommendations

Following their two-day summit in New Delhi, G20 leaders have issued a comprehensive 37-page declaration addressing various aspects of global finance and regulation, with a particular focus on cryptocurrency assets and central bank digital currencies (CBDCs). In this declaration, the G20 leaders expressed their commitment to closely monitoring the rapidly evolving landscape of crypto assets. They endorsed the "high-level recommendations for the regulation, supervision, and oversight of crypto-assets activities and markets and of global stablecoin arrangements" put forth by the Financial Stability Board (FSB). These recommendations, which encompass both crypto assets and stablecoins, were finalized by the FSB in July.

Highlighting the need for a consistent global approach to regulation, the leaders urged the FSB and Standard-Setting Bodies (SSBs) to actively promote the effective and timely implementation of these recommendations to prevent regulatory arbitrage. This unified approach is essential to maintain the integrity and stability of the financial system. 

The G20 leaders also welcomed several pivotal reports related to crypto assets, including the collaborative work plan between the FSB and SSBs, the IMF-FSB Synthesis Paper, and the Bank for International Settlements (BIS) report titled "The Crypto Ecosystem: Key Elements and Risks." Notably, the IMF-FSB Synthesis Paper presented a roadmap aimed at establishing a comprehensive policy and regulatory framework, considering the diverse risks associated with crypto assets, especially in emerging markets and developing economies (EMDEs). This framework would also align with the ongoing global efforts to combat money laundering and terrorism financing in line with Financial Action Task Force (FATF) standards.

The G20 leaders expressed their intention to discuss and advance this roadmap at the meeting of finance ministers and central bank governors scheduled for October 2023. This signifies their commitment to further refining the regulatory approach to crypto assets and ensuring its effectiveness on a global scale.

Additionally, the declaration highlighted the ongoing discussions surrounding CBDCs, acknowledging their potential macro-financial implications, particularly in the context of cross-border payments and the international monetary and financial system. The leaders lauded the BIS Innovation Hub (BISIH) Report on Lessons Learned about CBDCs and eagerly anticipated the forthcoming IMF Report on the potential macro-financial implications of widespread CBDC adoption. These discussions are poised to advance the global dialogue on the role of CBDCs in the evolving financial landscape.

Under India's G20 Presidency, the nations have actively engaged in discussions regarding the development of a global regulatory framework for crypto assets. This commitment demonstrates the G20's recognition of the importance of addressing emerging challenges in the realm of cryptocurrencies and digital currencies within a coordinated and harmonized international framework.

Disclaimer: The information provided in this section is for informational purposes only, doesn't represent any investment advice or FameEX's official view.