Although the G20 countries has embraced the need for a coordinated regulatory framework for crypto assets, News18 spoke to a few industry leaders who stressed the importance of a balanced approach to monitor evolving crypto ecosystem, growth, safeguard investors’ interests, and fight illicit activities.
The G20 New Delhi Leaders’ Declaration endorsed the Financial Stability Board’s (FSB) high-level recommendations for regulating and overseeing crypto assets and global stablecoin arrangements, the importance of global consistency to prevent regulatory arbitrage.
Further, it welcomed the IMF-FSB Synthesis Paper and Roadmap, which aims to create a comprehensive policy and regulatory framework, addressing risks specific to emerging markets and developing economies while complying with Financial Action Task Force (FATF) standards to combat money laundering and terrorism financing.
However, it was said in the declaration that finance ministers and central bank governors will convene in October 2023 to discuss the roadmap’s implementation, reinforcing the commitment to global crypto asset regulation.
Richard Teng, Head of Regional Markets at Binance, welcomed the roadmap presented by the IMF, as well as FSB and praised the dedication of global organisations to discussions about regulating crypto, reflecting a growing recognition of blockchain technology’s transformative potential.
“We acknowledge the recent developments at the G20 meeting where member nations have called for the swift implementation of the Crypto-Asset Reporting Framework (CARF) and amendments to the Common Reporting Standard (CRS) emphasising the importance of implementing a reporting framework for crypto assets. The nations also plan to coordinate discussions on tax matters. This marks a significant step forward in the global regulatory landscape for crypto and the overall Web3 industry under India’s G20 leadership,” said Teng.
Meanwhile, Aditya Malik, Nasscom and CII Mentor applauded this significant development, stressing the consensus among G20 citizens on using crypto as an instrument. He said: “While regulatory compliances have been trying to play catch-up for a long, this latest development makes one thing clear — There is a consensus that regulations need not be overreaching in a way to stop the proliferation of crypto which was the case earlier, due to the fact that it was not clearly understood hence the first response was to shut it down.”
Malik believes that by fostering understanding, ideation, dialogues, guidelines and policy, followed by effective implementation, a net positive outcome can be ensured for all stakeholders to achieve growth.
Rajagopal Menon, Vice President, WazirX, also highlighted the imperative need for nations to collaborate in forging a coordinated regulatory framework. According to him: “Such collaboration ensures that the immense potential of crypto assets is harnessed responsibly, safeguarding the interests of investors and fostering innovation.”
He advocated for a regulatory environment that strikes a balance between being too strict and too lenient—the Goldilocks zone of regulation. Menon said: “Overly restrictive regulation could stifle innovation and hinder the growth of the industry, while overly permissive regulation could lead to increased potentially harmful activities. It is about striking a delicate balance between the risks and benefits. This means setting clear guidelines for the industry, promoting transparency, and establishing a unified approach to tackle illicit activities.”
Meanwhile, Rahul Pagidipati, CEO of ZebPay, also commended India’s G20 presidency for initiating global crypto discussions and believes that this effort not only propels crypto growth in India but sets a positive precedent for the world.
He said: “The effort to bridge data gaps and gain insights into the utilisation of digital assets for payments is another significant development. It will enable policymakers to adopt an informed and analytical perspective when formulating regulations. We are enthusiastic about contributing to the development of regulations that are not only responsible but also effective in safeguarding the integrity of financial systems. We advocate for a framework that prioritises investor protection, anti-money laundering measures, and cybersecurity.”