G20’s Commitment to Balanced Crypto Regulation: Industry Leaders’ Perspectives

Although the G20 countries have acknowledged the necessity of a coordinated regulatory framework for crypto assets, Smartkhabrinews spoke with several industry leaders who stress the importance of approaching the evolving crypto ecosystem with balance to promote growth, protect investors, and combat illicit activities.

The G20 New Delhi Leaders’ Declaration has endorsed the high-level recommendations from the Financial Stability Board (FSB) regarding the regulation and oversight of crypto assets and global stablecoin arrangements. It highlights the importance of global consistency to prevent regulatory arbitrage. Furthermore, the declaration welcomes the IMF-FSB Synthesis Paper and Roadmap, which aims to establish a comprehensive policy and regulatory framework. This framework addresses the specific risks associated with emerging markets and developing economies while aligning with the Financial Action Task Force (FATF) standards to combat money laundering and terrorism financing.

However, it’s important to note that finance ministers and central bank governors will convene in October 2023 to discuss the roadmap’s implementation, demonstrating a firm commitment to global crypto asset regulation.

Industry’s Viewpoint

Richard Teng, Head of Regional Markets at Binance, welcomed the roadmap presented by the IMF and FSB. He praised the dedication of global organizations in discussing crypto regulation, recognizing the transformative potential of blockchain technology.

Teng stated, “We acknowledge the recent developments at the G20 meeting where member nations have called for the swift implementation of the Crypto-Asset Reporting Framework (CARF) and amendments to the Common Reporting Standard (CRS). This underscores the importance of implementing a reporting framework for crypto assets. The nations also plan to coordinate discussions on tax matters. This marks a significant step forward in the global regulatory landscape for crypto and the overall Web3 industry under India’s G20 leadership.”

Aditya Malik, Nasscom and CII Mentor, applauded this significant development. He emphasized the consensus among G20 citizens on utilizing crypto as a financial instrument. Malik stated, “While regulatory compliance has been struggling to catch up for a long time, this latest development makes one thing clear — there is a consensus that regulations need not be overly restrictive, as was the case earlier when crypto was not clearly understood, leading to initial responses of shutting it down.”

Malik believes that fostering understanding, dialogues, guidelines, and effective implementation can result in a net positive outcome for all stakeholders and drive growth.

Rajagopal Menon, Vice President at WazirX, also emphasized the imperative need for nations to collaborate in establishing a coordinated regulatory framework. He stated, “Such collaboration ensures that the immense potential of crypto assets is harnessed responsibly, safeguarding the interests of investors and fostering innovation.”

Menon advocated for a regulatory environment that strikes a balance between being too strict and too lenient, aiming for a Goldilocks zone of regulation. He explained, “Overly restrictive regulation could stifle innovation and hinder the growth of the industry, while overly permissive regulation could lead to increased potentially harmful activities. It is about striking a delicate balance between the risks and benefits. This means setting clear guidelines for the industry, promoting transparency, and establishing a unified approach to tackle illicit activities.”

Meanwhile, Rahul Pagidipati, CEO of ZebPay, commended India’s G20 presidency for initiating global crypto discussions. He believes that this effort not only propels crypto growth in India but also sets a positive precedent for the world. Pagidipati said, “The effort to bridge data gaps and gain insights into the utilization of digital assets for payments is another significant development. It will enable policymakers to adopt an informed and analytical perspective when formulating regulations. We are enthusiastic about contributing to the development of regulations that are not only responsible but also effective in safeguarding the integrity of financial systems. We advocate for a framework that prioritizes investor protection, anti-money laundering measures, and cybersecurity.”