The G20 members have agreed that there should be a globally coordinated understanding to govern crypto assets and also to deal with the issues linked to it, according to Finance Minister Nirmala Sitharaman, who is in the US for a number of meetings. She claimed that as digital currency assets are not backed by governments, they are subject to market volatility.
After meeting with ministers from G20 member countries on Thursday, Sitharaman stated that everyone had swiftly addressed the matter during India's G20 chairmanship. At a press conference on Thursday in Washington, the minister announced that a "synthesis paper" will be written on issues relating to digital assets.
India has consistently insisted that it needs a coordinated international effort to address the issues brought on by cryptocurrencies like bitcoin and ether. In February, the finance ministry reported holding a seminar for G20 members to talk about developing a standard framework.
Sitharaman and Reserve Bank of India Governor Shantikanta Das co-chaired a meeting of finance ministers and central bank governors from member countries on the sidelines of the International Monetary Fund (IMF) and World Bank's annual spring meeting.
Sitharaman said: “The way in which we are seeing this pan out during our presidency is the IMF’s paper is being discussed, FSB’s paper also will be taken up, and a synthesis paper will be prepared from the IMF paper and the FSB paper both put together.”
She continued by saying that studies conducted by the FSB and the IMF show that crypto assets, especially those that are not held by central banks and are not backed by any sovereign asset, might lead to macroeconomic instability.
“Today, I am very glad to have heard the European Central Bank chief Christine Lagarde speak about specific examples of how money has been routed into this operation, resulting in too many such companies who are getting involved in it raising questions of where the trail is,” the minister said on Thursday.
In India, there is no official organisation like the RBI that regulates the use of cryptocurrencies as a form of payment. When dealing with cryptocurrencies, there are no established norms or rules for resolving conflicts.
Digital assets and fiat currencies, virtual digital assets (cryptocurrencies), and other such digital assets, their trading, safekeeping, and related financial services have all been brought under the purview of the Prevention of Money Laundering Act (PMLA) by the Centre via a notification dated March 7, 2023.