G20 agency gives a miss to several key crypto concerns – Times of India

GANDHINAGAR: The recommendations of the Financial Stability Board (FSB) on crypto assets, released on Monday, have not dealt with several areas crucial to regulate the instrument, a top Indian official said after the agency set up by the G20 proposed licensing & regulation of issuers and service providers, while pushing for cross-border cooperation, including consultation and arrangements to share information.
Areas such as anti-money laundering, combating terror finance and cybersecurity — issues that were flagged by home minister Amit Shah at a G20 event recently — have been left out of the framework to manage the instruments on which opinion is widely split, especially after some of them collapsed.
Besides, there is no men-tion of consumer and investor protection, market integrity, monetary policy, monetary sovereignty and other macroeconomic concerns that have been flagged by the Reserve Bank of India (RBI). The regulator had sought a ban on crypto assets, which have been brought under the tax net by the government.
Even aspects related to in-formation sharing are not seen to be fool-proof, unlike the system for tax. The other concern is related to stable coins.
By its own admission, the FSB report only covers aspects related to financial stability and has not dealt with significant aspects of overall regulation. To address this, the paper has called for prudential and othernorms which factor in the size and risk of the entities.
The FSB, which is also working on a synthesis paper with the IMF, had been tasked by the G20 membership to prepare a plan to regulate crypto assets.
“Crypto-asset markets are fast evolving and could reach a point where they represent a threat to global financial stability due to their scale, structural vulnerabilities and increasing interconnectedness with the traditional financial system. The rapid evolution and international nature of these markets also raise the potential for regulatory gaps, fragmentation and arbitrage… Authorities need to be ready to regulate, supervise, and oversee these activities and the associated issuers and service providers that have the potential to pose risks to financial stability,” FSB said.