New Delhi: India is set to hold broader discussions regarding the regulation of crypto assets following the recent support of a synthesis note by the International Monetary Fund (IMF) and the Financial Stability Board (FSB) in the G20 Leaders’ Declaration. Ajay Seth, Secretary of the Department of Economic Affairs (DEA), announced it on Sunday, highlighting the global consensus on cryptocurrency regulation.
“Since there is consensus at the multilateral level on crypto currency and endorsement from the leaders, we will now study it and make our policy accordingly,” Seth stated.
India’s approach to crypto asset regulation will be guided by international consensus, going beyond the G20. A government official acknowledged that a single country’s action alone would not be effective and that cooperation with the global community is necessary
The IMF-FSB synthesis paper highlights the macroeconomic risks related to crypto assets and aims to establish a “minimum baseline that jurisdictions should meet” while addressing common issues faced by most jurisdictions.
“If any country wants to have a stricter regulation, it can frame a more restrictive one depending on the risk it sees from cryptos. If all countries agree on the same regulation, there will be no arbitrage,” the official added.
The paper advises against blanket bans on cryptocurrencies, citing their costly and technically challenging enforcement as the reason. It suggests that banning crypto is not an “easy option” and that temporary restrictions should not replace vigorous macroeconomic policies.
The IMF-FSB recommendations, along with an implementation roadmap, will be discussed at the fourth meeting of G20, between finance ministers and central bank governors in Marrakech, Morocco, during the annual meetings of the World Bank and IMF, scheduled for October 9-15.
Leaders and government officials from various countries unanimously accepted the IMF-FSB synthesis paper, paving the way for discussions on its implementation.
Former DEA Secretary Subash Garg said that India has abandoned the idea of banning crypto altogether, at least in public discourse. He suggested that India might instead consider disallowing banking system access or expanding indirect tax regulations related to cryptocurrencies.
While discouraging outright bans, the synthesis paper recommends that cryptocurrencies not be recognised as official currency or legal tender and advises central banks to avoid holding crypto assets in their official reserves due to the risks they pose to monetary and global financial stability.