G20 nations are bracing for an avalanche of digital currency regulation papers from the Financial Stability Board (FSB), the International Monetary Fund (IMF), and the Bank for International Settlements (BIS).
The incoming papers stem from the recently concluded meeting involving finance ministers and central bank governors of the G20 nations held at Bengaluru, India. The summary document stated that all G20 ministers and central bank governors agreed that a global framework for digital currency regulation was imperative.
In July, the FSB will take the lead with the release of critical recommendations for G20 nations to follow in their quest for digital currency directives. Per the document, the FSB’s recommendations will place a premium on the policing of stablecoins and their issuers, digital currency exchanges, and anti-money laundering (AML) processes.
G20 nations expect to receive further guidance from a joint synthesis paper from the IMF and the FSB in September. The paper will delve into the macroeconomic implications of digital currencies, focusing on preventing the “cryptoization” of G20 economies.
“We look forward to the IMF-FSB Synthesis Paper, which will support a coordinated and comprehensive policy approach to crypto-assets by considering macroeconomic and regulatory perspectives, including the full range of risks posed by crypto assets,” according to the summary document.
The BIS is also expected to make its submissions to the fray with a detailed report on the analytical and conceptual issues related to digital assets and central bank digital currencies (CBDCs). Although a date was not provided for the report’s submission, the BIS is projected to publish it before the end of the year.
“We will continue to explore the macro-financial implications of the potential introduction and widespread adoption of Central Bank Digital Currencies (CBDCs) and their effects on cross-border payments, as well as on the international monetary and financial system,” read the statement.
No more a mirage
For a long time, the prospects of a global outlook for digital currency regulations appeared bleak as nations sought to regulate the fledgling industry in accordance with the peculiarities of their local economies. According to India’s Finance Minister Nirmala Sitharaman, the result is fragmented laws leading to increased regulatory arbitrage from bad actors.
Nirmala stated that India will use its G20 Presidency to press for a unified approach in digital currency regulation among member nations. As the first G20 meeting of India’s presidency comes to a close, pundits are ecstatic that the foundations of a global digital currency regulatory framework have been laid.
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