G20 nations moving closer to consensus on digital currency regulations

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G20 finance ministers and central bank governors are in India to deliberate on a global strategy for regulating digital currencies amid high-profile industry collapses.

The three-day meeting in Gandhinagar saw attendees discuss the current state of digital currency regulation and attempt to chart a course forward. According to CNBCTV 18, the finance ministers and central bank governors will have to agree on “whether a unified regulatory framework for cryptocurrencies and crypto assets can be established.”

While it appears that a majority of G20 nations support common global regulations for digital currencies, others are pushing for rules that will reflect the peculiarities of their local jurisdictions. As such, a chunk of the discussions will center on the digital currency regulations in emerging markets and countries outside the G20.

The meeting also includes a series of discussions revolving around the protection of local investors and the financial integrity of national economies from risks associated with digital currencies. There are also talks on the need to improve industry innovation with a uniform integration of retail and wholesale central bank digital currencies (CBDCs).

G20 member countries will also share ideas to strengthen the reach of regulators in countries housing international digital asset exchanges and issuers of stablecoins. The G20 believes that holding countries with digital currency adoption rates will have a positive effect on efforts for global regulation.

G20 leaders will review reports made by the International Monetary Fund (IMF), the Financial Stability Board (FSB), Organization for Economic Cooperation and Development (OECD), and Bank for International Settlements (BIS).

“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,” read a G20 meeting report.

G20 finance ministers and central bank governors met in Bengaluru in February to formally open discussion for a global standard for digital asset regulation. Led by India, the coalition of nations is seeking to prevent “regulatory arbitrage” from erring digital currency providers.

Galloping to a global regulatory framework

The G20 is not the only entity pushing for a concerted global effort for digital currency regulation. There’s also the G7, whose member nations are extending the call for uniform standards to CBDCs.

“We have to address risks from the development of CBDC by ensuring factors such as appropriate transparency and sound governance,” said Japan’s Vice Minister of Finance for International Affairs, Masato Kanda.

In May, the International Organization of Securities Commissions (IOSCO) published the first draft of global regulations to guide its members in policing digital currencies, seeking to avoid a repeat of FTX’s collapse.

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