G20 members eager to regulate the crypto sector

The G20 is pursuing global crypto regulation.

The G20 is pursuing global crypto regulation. To that end, the finance ministers of the member countries discussed aligning the guidelines.

The G20 meeting in Bangalore, India, was actually about the war in Ukraine and its economic consequences. Inflation is still not under control, and rate hikes are causing trouble, especially in developing countries with high debt. These are the issues that need answers.

The fact that the representatives of the world's 20 largest industrialized and emerging economies took the time to talk about crypto nonetheless shows the importance the countries place on digital currencies and tokens. In a joint position paper the finance ministers gave clear instructions to the International Monetary Fund (IMF), the Bank for International Settlements (BIS) and the Financial Stability Board (FSB). They must now work out the guidelines.

Focus: Stablecoins

The FSB had already proposed measures last year. The council should flesh out the standards and present them in July 2023. The focus is on regulation, supervision and monitoring of the crypto sector. Specifically, global stablecoins must be addressed. IMF chief Kristalina Georgieva told Bloomberg that it's mainly about backing assets for customers. If rules are missed, a ban could be considered, Georgieva said.

Together with the FSB, the IMF will assess in a document the macroeconomic outlook and risks of crypto assets. After the collapse of the Terra ecosystem, including the stablecoin UST, this step is not very surprising. Soon after the collapse the BIS spoke out for tougher measures.

Meanwhile, the "Bank of Central Banks" is focusing on CBDC development. The bank unveiled Monday the project "Icebreaker." It serves as a platform that should enable cross-border payments in various CBDCs in the future.

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