‘G20 to discuss crypto asset regulation’

Global regulation of crypto assets, debt distress, international taxation and climate financing are among the key priority areas for discussion for India during its upcoming G20 presidency, finance minister Nirmala Sitharaman said on Tuesday.

She said G20 members would also discuss the spillover impact of western sanctions due to the Russia-Ukraine war on food and energy security.

On crypto assets, Sitharaman stressed the need for global regulation, as no single country could regulate it. “International taxation will be an agenda to take forward…the IMF and the OECD have already started doing a lot of work… so we need to encourage them also to understand how crypto assets can be regulated with all countries being on the board…because no one single country can succeed individually being in silos and trying to regulate the crypto assets,” said Sitharaman.

She was speaking at an Indian Council for Research on International Economic Relations (ICRIER) event that was also attended by G20 sherpa Amitabh Kant and chief economic advisor V. Anantha Nageswaran.

“We need to regulate crypto assets in national interest because we do not know what the trail leads you to... is it drug funding? Is it terror funding?... Or it is just gaming the system.. that regulation cannot be successful if one country does it…We have not come out with any plans as yet.”

She said G20 members need to come on board to see how best it can be done.

“I know work has been done by the financial stability board, OECD, IMF and also the BIS…We will have to bring all of them together and then put it on the table for the members to have a meaningful conversation on it,” said Sitharaman.

The minister clarified that she was only referring to crypto assets and not currency, which the RBI is working on.

Nageswaran said identifying consensus-based solutions for accelerating the scale and scope of the response of the global community to many transboundary challenges, such as regulation of virtual assets, would be a priority of India’s G20 presidency.

“Regulation of virtual assets, cross border remittances, global capital flows and how to create buffers for developing countries are some of the issues to deal with under Indian presidency of G-20,” he said, adding that there are no easy solutions to these.

Sitharaman said that showcasing India’s digital revolution would be another priority during the G20 presidency and that involves the nation’s central bank digital currency, which the RBI started testing on Tuesday. India will assume presidency of the G20 for a year, from 1 December 2022 to 20 November 2023.

Regarding spillovers of the sanctions against Russia, Sitharaman said, “Certainty members will have to talk about it… actions taken at the early stages of the Russia-Ukraine war, whether that is sanctions on the payments through SWIFT or subsequently on the fuel trading… So there are spillovers of decisions and those will have to be definitely discussed.”