G20 Meeting of Financial Chiefs Likely to Discuss Common Approach to Crypto Regulations: Report

The first Finance Ministers and Central Bank Governors Meeting of G20 under India’s presidency, taking place from February 23 to 25 at Bengaluru, is expected to discuss cryptocurrencies, among other issues, Reuters said in a report. 

Indian Finance Minister Nirmala Sitharaman, who plays the host, earlier said that the group is exploring if it can collectively regulate cryptocurrencies.  

Pitch for Common Regulations

“We are talking with all nations, if we can make some standard operating procedure which is followed by everyone to make a regulatory framework, and if it can be effective,” Reuters quoted her in a February 11 report. 

She argued that given the sophisticated technologies involved, the G20 is exploring the possibility of putting in place a common regulatory framework for cryptocurrencies that all nations can follow.     

Facing tremendous pressure from 115-million strong crypto investors on the one hand and the regulators that don’t want to give any space to digital assets in its financial system on the other hand, the Indian government has often talked about the need for a global and concerted approach to such regulations. 

Regulatory Crackdowns

Over the past few weeks, crypto regulations have become a burning topic, with US regulators taking a tough stance against some of the services offered by leading companies. 

For instance, the veteran crypto exchange Kraken was made to stop staking services for US investors and pay $30 million in a settlement. In another instance, the issuer of BUSD, the third largest stablecoin with $16 billion in outstanding, was made to stop operations by the New York Department of Financial Services (NYDFS). Both have been charged with offering unregistered securities. 

Besides, US Securities and Exchange Commission (SEC), which has filed a separate lawsuit against BUSD’s issuer Paxos, has warned other crypto companies with similar action if they are found to be violating existing laws. Many, however, believe that in absence of clear regulations, the SEC may be indulging in regulatory overreach. 

Catching Up With Regulations

In contrast, the European Union approved the Markets in Crypto-Assets (MiCA) Regulation in October 2022. The exhaustive nature of regulations under MiCA, which have not come into force yet, allows crypto-asset service providers (CASPs) to adapt and comply with the requirements before they become mandatory. 

Both the US and the EU are members of G20. Given this, a discussion on crypto regulation at the upcoming meeting of finance ministers and central bank governors would be interesting to watch out for.