Decrypt: G20 is ideal plank to formulate global crypto policy

• RAJ KAPOOR

NEW DELHI: For India, the G20 has been a blessing in disguise. The oft discussed crypto policy takes the spotlight once again. The Indian presidency assumed the G20 presidency and requested the International Monetary Fund (IMF), and the Financial Stability Board (FSB) to issue a combined report with policy recommendations - a document, that includes ideas for regulating stablecoin and decentralised finance (DeFi) operations.

There is a lot to look forward to and this is my G20 recommendation list for the same.

To kickstart, this could well be India’s “Kodak Moment,” where the G20 leadership should put forward a unified framework for cryptocurrencies and a financial inclusion action plan. This is my initial anticipation. India needs to bell this cat and what better platform than the G20.

Another recommendation is that India should abandon plans for a blanket ban on cryptocurrencies as this will not be effective in the long run. Rather, India should focus on addressing the factors that generate demand for cryptocurrencies, such as consumer preferences for digital means of payment. India’s statistics speak for themselves.

I also recommend that India develops a framework and proposal for crypto service providers to be regulated, along with implementing FATF anti-money laundering and counter-terrorist financing (AML/CFT) principles in the market. India already has anti-money laundering standards and a crypto tax structure in place, so I expect India to bring out its crypto bill, which has been dormant for a while now, after the G20, and the G20 should be the precursor of the Bill and the Policy.

Going forward, I recommend that authorities should have and use sufficient powers and tools, as well as necessary resources, to control, supervise, and oversee crypto-asset activities and markets, as well as successfully enforce relevant laws and regulations, where appropriate. They should mandate crypto-asset issuers and service providers to have in place and publish a comprehensive governance framework with clear and direct lines of responsibility and accountability for all functions and operations. In addition to crypto frameworks and regulation, G20 leaders should underline the necessity of deploying DPI for improved connectivity in order to speed the implementation of the 2030 Agenda for Sustainable Development and accomplish the Sustainable Development Goals both within and outside of the G20. This is in line with crypto legislation and the advancement of digital transformation.

Finally, authorities should, as appropriate, require crypto-asset issuers and service providers to have robust systems and processes for collecting, storing, safeguarding, and timely and accurate reporting of data, as well as relevant policies, procedures, and infrastructures, in each case proportionate to their risk, size, complexity, and systemic importance and they should have access to data as needed and appropriate to carry out their regulatory, supervisory, and oversight responsibilities.

Leadership involves making difficult decisions and supporting them, thus it is my wish (more than a recommendation ) that India promotes the development of global crypto standards, since there is no better time or chance than now. We had previously missed out on leadership roles.

We can make history with the crypto regulatory frameworks agenda, and I expect nothing less as leadership is simply the art of giving people a platform for spreading ideas that work. G20 is just that platform for India.