Crypto issue requires immediate attention, says FM Sitharaman
The minister noted that there was consensus among G20 members to have a globally coordinated policy response on crypto assets that takes into consideration the full range of risks.
WASHINGTON: Issues related to crypto assets require immediate attention and the response of the G20 has to ensure that they do not lose any potential benefits while protecting economies from harm, Union Finance Minister Nirmala Sitharaman has said.
Sitharaman was part of a brainstorming session on "Macrofinancial Implications of Crypto Assets" with G20 finance ministers and central bank governors at the IMF's headquarters here on Friday.
India currently holds the rotating annual presidency of G20 countries.
Issues related to crypto have emerged as a major point of discussion among G20 countries and there is unanimity among member nations about the urgency to regulate this sector.
The brainstorming session was attended by global experts on this issue.
In her remarks, Sitharaman said the G20 acknowledges the work of the International Monetary Fund (IMF) and the Financial Stability Board (FSB) in bringing out key elements of policy and regulatory framework. She also said a synthesis paper, which would integrate macroeconomic and regulatory perspectives of crypto assets, is required.
The minister noted that there was consensus among G20 members to have a globally coordinated policy response on crypto assets that takes into consideration the full range of risks, including those specific to emerging markets and developing economies.
"I am glad to say that there is a greater acceptance among all G20 members, that any action on crypto assets will have to be global," she said and added that "the G20, I think, has responded fairly with alacrity (on the crypto challenge)."
On the sidelines of the annual spring meeting of the International Monetary Fund (IMF) and the World Bank, Sitharaman along with Reserve Bank of India Governor Shaktikanta Das co-chaired a meeting of finance ministers and central bank governors from member countries. Issues related to cryptocurrency and its challenges were discussed at the meeting.
"The G20 and its members agree that it's not going to be possible to have an independent standalone country dealing with the crypto assets and that it has to have a globally coordinated understanding on how to go about regulating crypto assets," she said in response to a question.
"The way in which we are seeing this pan out during our presidency is the IMF's paper is being discussed, FSB's (Financial Stability Board) paper also will be taken up, and a synthesis paper will be prepared from the IMF paper and the FSB paper both put together, Sitharaman said.
There will be a discussion in September and October, and at the "end of the day, we will see a roadmap being readied on how and what kind of understanding the members of the G20 have in this, and it can be taken further forward on specific actions of regulation as and when the G20 takes a call on it", the finance minister said.
Noting that she does not want to preempt a decision, Sitharaman said the work done by the FSB and the IMF indicate that crypto assets, particularly those that are outside of central banks, being not backed by any sovereign asset, can cause macroeconomic instability.
"So, today, we are in the position to see how countries are now recognising that it is not just a crypto asset regulatory issue, where countries will have to come together, but the IMF dealing with it has also brought in this time mention that they can be issues of macroeconomic stability itself," she said.
"Today, I am very glad to have heard the European Central Bank chief Christine Lagarde speak about specific examples of how money has been routed into this operation, resulting in too many such companies who are getting involved in it raising questions of where the trail is," the minister said.
Sitharaman stressed that it was a "very substantive" discussion and the agreement that all of them had was this: "Yes, it has got to be globally handled."