India's G20 Presidency Aims To Develop a Common Framework To Deal With Crypto Risks, Says Nirmala Sitharaman According to the finance minister, G20 is trying to bring together all countries to address debt distress in middle-income and low-income nations like Sri Lanka and Ghana
Opinions expressed by Entrepreneur contributors are their own.
You're reading Entrepreneur India, an international franchise of Entrepreneur Media.
Finance Minister Nirmala Sitharaman has said India's G20 presidency aims to develop a common framework for all countries to deal with risks associated with cryptocurrencies in the wake of the recent shocks witnessed in the crypto market, according to a PTI report.
While at a discussion in Peterson Institute for International Economics, Sitharaman said that, "Cryptocurrencies are a very important part of the discussion under the G20 India presidency, given so many collapses and shocks in cryptocurrencies. We seek to develop a common framework for all countries to deal with this matter. Also, G20 is trying to bring together all countries to address debt distress in middle-income and low-income nations like Sri Lanka and Ghana."
As per the report, the last year's episode of FTX's bankruptcy, and its spat with Binance triggered a huge sell-off in the market and reduced liquidity. This event made the world realise the vulnerability of this asset class as they do not have any underlying value. The same year, the finance minister had also highlighted that midst the pioneering fintech revolution, the biggest risk of cryptocurrency could be money laundering and its use for financing terror.
During the first G20 Finance Ministers and Central Bank Governors (FMCBG) meeting in February, it was agreed to strengthen multilateral coordination by official bilateral and private creditors to address the deteriorating debt situation and facilitate coordinated debt treatment for debt-distressed countries.
The Economic Survey released on January 31st, highlighted the need for a common approach for the regulation of cryptocurrency, adding the underlying risks and high volatility of the sector. On February 4th, Economics Affairs secretary Ajay Seth, has also reportedly said that the legislation governing the crypto assets would be implemented this year. He also added that the technology of crypto assets like blockchain and others can be used but its use in the financial sector can have several risks.
In a bilateral discussion with her counterparts ahead of the G20 finance and central bank governors meet in Bengaluru, Nirmala Sitharaman had discussed issues relating to crypto assets, strengthening multilateral development banks and global debt vulnerabilities.
"India's G20 presidency will create discussion and sharing of information on this issue and it will be taken forward positively," said Sitharaman.
With regard to the minister's statement, Rahul Pagidipati, CEO, ZebPay has shared his view point with Entrepreneur India that, "It is great to see the efforts undertaken through India's G20 presidency for the crypto industry. We strongly believe that a regulatory framework ensuring investor protection and a less restrictive tax policy will enhance the growth and adoption of crypto in India and around the world. We also commend the focus on addressing debt distress in developing nations, as this will play a crucial role in promoting economic stability and global growth. At ZebPay, we are committed to providing a secure and transparent platform for our users to trade crypto, and we look forward to working with regulators and policymakers to create a healthy regulatory environment that fosters innovation and promotes responsible usage of digital assets."
Sathvik Vishwanath, CEO and co-founder at Unocoin, has also contriobuted his opinion that, "India's Finance Minister Nirmala Sitharaman has stated that India's G20 presidency will seek to create a universal framework for managing the risks associated with cryptocurrencies. The move follows the recent turmoil in the cryptocurrency market and aims to protect investors and ensure stability in the sector. In bilateral talks ahead of the G20 finance and central bank governors' meeting, Sitharaman discussed issues surrounding crypto-assets, multilateral development banks and global debt vulnerabilities. Creating a common framework for managing the risks associated with cryptocurrencies could help ensure stability in the sector and facilitate responsible use."