The G20 has announced its plan to develop a common framework for dealing with risks associated with cryptocurrency investments. This move comes after multiple ecosystem collapses that have impacted investors worldwide, media reports said.
The Indian Finance Minister, Nirmala Sitharaman, who is leading the G20 presidency, has called for coordinated global crypto policies. Emphasizing the importance of cryptocurrencies in the G20 India presidency discussions, she called for a coordinated effort from all jurisdictions, citing the numerous collapses and shocks the crypto industry has experienced.
Sitharaman emphasized that disparate reforms would not help address the global reach of cryptocurrencies. She expressed the objective of establishing a unified framework that all nations can adopt to address this concern. This common framework would help all countries deal with the risks associated with cryptocurrency investments.
The G20 countries’ plan to develop a global framework against crypto-related risks is a significant step in the right direction. With the increasing adoption of cryptocurrencies globally, there is a need for a coordinated effort to address the risks and challenges associated with this new asset class.
Sitharaman highlighted that the G20 has an opportunity to bring global economies together to address debt distress and hyperinflation in smaller countries, such as Sri Lanka and Ghana. She pointed out that multilateral institutions are working on resolutions for debt-laden countries, and the G20 presents a chance for India to collaborate with other countries to find solutions.
Meanwhile, developing a common framework to mitigate cryptocurrency risks is a complex and lengthy process that will require significant effort and cooperation from all jurisdictions. With India’s G20 presidency ending on November 30, 2023, the group of 20 nations has a limited timeframe of approximately seven months to formulate comprehensive crypto reforms that can be applied across jurisdictions.
