In a letter to finance ministers from the G20 countries ahead of the São Paulo meeting, the chairman of the Financial Stability Board also pledged to explore the impact of asset tokenization.
The Financial Stability Board has released its 2024 work program and plans to take a closer look at tokenization, including exploring tokenization projects and completing work on its financial stability implications.
With the newly released joint paper, FSB and IMF encourage nations to "address data gaps necessary to understand the rapidly changing crypto-asset ecosystem."
Current G20 president India is proposing a global digital asset regulatory framework in the hopes of steering the international body's agenda toward a coordinated approach to digital asset oversight.
The recommendations from the Financial Stability Board include fostering cross-border regulatory collaboration, improved disclosures of digital assets, and providing legal claims on stablecoins for prompt redemption.
While Indian regulators are focused on protecting retail investors, the broader payments ecosystem faces significant risks from digital currencies, according to the Reserve Bank of India.
In line with India's pledge to develop a framework to regulate the digital asset industry, the FSB, IMF, and BIS will submit recommendations to G20, focusing on countering risks tied to the assets.
The Financial Stability Board is set to publish recommendations for stablecoin regulations this year, and it says most existing stablecoins fall short of these proposed standards.
India is mulling a partnership with the International Monetary Fund (IMF) and the Financial Stability Board (FSB) in its quest for an international regulatory framework.
The Financial Stability Board has previously adopted a passive stance on the asset class, stating that while digital assets are inherently risky, they do not pose significant risks to the broader financial markets.
The FSB encourages the public to share their views on the new framework of applying banking regulations to the digital asset industry.
The finance ministry and the Reserve Bank of India are reportedly in agreement that banning non-custodial digital asset wallets without international coordination will be an effort in futility.
