Nirmala Sitharaman, India’s Finance Minister, showed her concern about the risks associated with cryptocurrencies following the recent incidents that shocked the crypto market. She said India’s G20 presidency aims to establish a common framework for all countries to combat crypto-related vulnerabilities, according to a PTI report.
During a discussion at the Peterson Institute for International Economics in Washington, DC, Sitharaman cited the various crypto collapses of last year such as the FTX failure. She then emphasized the need for coordinated efforts from all jurisdictions.
According to reports, the bankruptcy of FTX last year and its dispute with the world’s largest crypto exchange, Binance, led to a huge sell-off in the market, reducing volatility. This activity has made the world realize the vulnerability of this digital asset class as it has no particular value and regulatory structure.
“Cryptocurrencies are a very important part of the discussion under the #G20India presidency, given so many collapses and shocks in cryptocurrencies. We seek to develop a common framework for all countries to deal with this matter.”
Furthermore, Sitharaman also revealed that the G20 also has an eye on bringing global economies together. The goal is to eliminate hyperinflation and debt problems, especially in countries like Sri Lanka and Ghana. Both countries are general examples of low-income and middle-income countries and boast small economies.
Further, she added:
“Multilateral institutions are coming up with resolutions for debt-laden countries in 3 to 5 years.”
India’s Struggle For Crypto Framework During G20 Presidency
The G20 is an intergovernmental forum. It consists of 19 countries and the EU (European Union). On 1 December 2022, India took over the presidency of the G20 after Indonesia.
During India’s presidency, the G20 called for Standard Operating Procedures for crypto. In this meeting with finance ministers and central bank governors (FMCBG), Sitharaman revealed a vision for the crypto regulatory framework.
In the previous conversation, India requested the IMF (International Monetary Fund) and the FSB (Financial Stability Board) to collaborate on a technical paper for crypto regulations. As well as Indian Finance Minister asked the Bank of International Settlements (BIS) to submit detail on conceptual and analytical problems related to digital assets and their solutions.
India’s G20 Presidency is expected to end on November 30, 2023. However, the group has only seven months to develop a global crypto regulatory structure. The framework is expected to be applicable to all regions.
In addition, government reforms tend to lead to hyperinflation in a certain way, as seen in the previously struggling economy of El Salvador. But with the help of Bitcoin (BTC), El Salvador managed to reduce the impact of hyperinflation and dependence on the US dollar.