A joint synthesis paper from the International Monetary Fund (IMF) and the Financial Stability Board (FSB) will be presented to G20 members during the leadership summit under India’s presidency on September 9th and 10th. The paper acknowledges the challenges of implementing a complete ban on crypto-asset activities and instead calls for comprehensive regulatory oversight. The IMF and FSB suggest that targeted restrictions may be more suitable, particularly for resource-constrained authorities or to support effective regulatory frameworks.
In the past year, Indian regulators have shifted their stance on regulating crypto, moving from advocating for a complete ban to supporting a global regulatory framework. The synthesis paper warns against granting crypto assets legal tender status, as this could pose risks to monetary sovereignty. It also advises against central banks holding crypto assets in their official reserves due to potential risks to monetary and global financial stability.
The report emphasizes the importance of clear tax treatment for crypto assets and protecting monetary sovereignty. It also recognizes that developing economies may face higher macro-financial risks associated with crypto assets due to factors such as less developed tax frameworks, a large unbanked population, and higher cross-border transaction costs.
The paper suggests that temporary restrictions should not replace robust macroeconomic policies and underscores the need for effective frameworks, comprehensive oversight, and targeted restrictions where necessary. This synthesis paper provides valuable insights for policymakers worldwide as they continue discussions on regulating crypto assets within the G20.