Will G20 Summit regulations would lead a Crash In Crypto Markets?

At the 2023 G20 Summit, finance ministry officials and central bankers from G20 countries are reportedly in agreement that crypto assets should be regulated, with a complete ban on them also being discussed as a possibility. India has proposed a joint technical paper by the IMF and Switzerland-based Financial Stability Board to help formulate regulations for crypto assets.

India's year-long G20 presidency gives it the power to set the crypto agenda for the intergovernmental forum. At a closed-door focus group meeting involving officials of more than 10 emerging-market economies earlier this month in New Delhi, the consensus was that crypto assets are “risky” and not “worth it”. This is expected to represent the view of the Indian Central Bank.

India plans to prioritize development of a framework for global regulation of unbacked crypto assets, stablecoins and decentralized finance and will explore the “possibility of [their] prohibition”. The Indian central bank has not changed its position that cryptocurrencies should be prohibited.

The government is currently consulting on plans to bring the crypto market into regulation that protects consumers of financial services. Finance Chiefs have been told to tackle threats to stability posed by cryptocurrencies at this week's meeting of G20 finance ministers and central bank governors in Washington. Sir John Cunliffe, deputy governor of the Bank of England with responsibility for financial stability, has warned of the need for greater regulation of the crypto market as a result of recent market turmoil.

Overall, while there is no current ban on cryptocurrency at this time, there is discussion among G20 countries about potential regulations or prohibitions on certain types or uses of cryptocurrency.

- Shaival Amin.