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“Policy Perspective: Debating the road to policy consensus on crypto assets” under G20 India Presidency

GS Paper 3


Syllabus: Indian Economy and related issues

 Source: PIB


Context: Digital technology is playing an important role in achieving India’s G20 Presidency goal (“Vasudhaiva Kutumbakam” or “One Earth, One Family, One Future”).



  • The Indian Presidency’s priority is to make the digital financial system more efficient, secure, and stable.
  • For this to happen, financial sector regulatory reforms are essential.
  • However, there is no comprehensive global policy framework for crypto assets, despite the rapid evolution of the crypto universe.
  • The global standard-setting bodies (such as the FATF, Financial Stability Board (FSB), Basel Committee on Banking Supervision (BCBS), etc) have been coordinating the regulatory agenda.


Probable benefits of crypto assets:

  • Cheaper and faster cross-border payments
  • More integrated financial markets
  • Increased financial inclusion



  • Greater interconnectedness between crypto assets and the traditional financial sector
  • Complexity and volatility around crypto assets
  • Critical digital infrastructure/platforms
  • Global information gaps pertaining to the crypto asset


Status of Crypto regulation in India:

  • RBI has announced Central Bank Digital Currency (CBDC), a sort of official cryptocurrency, for retail as well as wholesale users in 2022 on a pilot basis.


How can the Indian G20 Presidency shape Global Policy Dialogue on Crypto Assets?

  • Broaden the discussion on crypto assets: Beyond financial integrity concerns and capture the macroeconomic implications and widespread crypto adoption in the economy.
  • Inform policymakers: On the broader macroeconomic and financial stability implications of crypto assets.
  • Highlight the consequences of crypto adoption: On the internal and external stability of a country’s economy as well as on the structure of its financial system.


Way Forward:  IMF’s 9 points crypto asset action plan

  • Safeguard monetary sovereignty and stability by strengthening monetary policy frameworks and do not grant crypto assets legal tender status.
  • Guard against excessive capital flow volatility and maintain the effectiveness of capital flow management measures.
  • Analyse and disclose fiscal risks and adopt unambiguous tax treatment of crypto assets.
  • Establish legal certainty of crypto assets and address legal risks.
  • Develop oversight requirements for all crypto market actors.
  • Establish a joint monitoring framework across different domestic agencies and authorities.
  • Establish international collaborative arrangements.
  • Monitor the impact of crypto assets on the stability of the international monetary system.
  • Strengthen global cooperation to develop digital infrastructures.


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