G20’s impact on cryptocurrencies: When can we see the crypto market rising?
G20 Presidency this year, India placed a strong focus on various subjects, including cryptocurrencies. In a world wrestling with the intricacies and potential of this emerging asset class, India has called out the need for a global framework and consensus in cryptocurrency regulation.
Acknowledging the global nature of cryptocurrencies, under India's presidency, the International Monetary Fund (IMF) and Financial Stability Board (FSB) have crafted effective recommendations that safeguard investors and encourage innovation.
What are the recommendations of IMF and FSB?
Firstly, it discusses the macroeconomic and financial stability risks associated with cryptocurrencies. The recommendation focuses on cash flows, taxation policies, and financial integrity.
It signifies a progressive step towards providing greater clarity, potentially necessitating licensing for service providers and reporting mechanisms for fraudulent transactions. This approach aims to reduce data gaps and align cryptocurrencies with conventional asset regulation.
Secondly, the report suggests that emerging markets and developing economies (EMDEs) may choose to implement targeted measures beyond the global regulatory baseline to address specific risks, giving them liberty.
Thirdly, by adhering to Financial Action Task Force’s (FATF) Anti-Money Laundering/ Combating the Financing of Terrorism guidelines applicable to Virtual Assets and Virtual Asset Service Providers, jurisdictions can establish a robust framework for identifying and preventing illicit financial activities within cryptocurrencies. This proactive approach not only improves the security of the crypto ecosystem but also contributes to the broader global efforts to combat money laundering and
