Bank Collapses Underscore G-20 Hesitance on Crypto: Source
As the current president of the G-20, India has the power to ask international bodies tasked with framing the global crypto rules to factor in recent bank collapses.
The recent collapses of crypto banks have only underscored the caution of the Group of 20 (G-20) on crypto assets, a highly placed G-20 source told CoinDesk.
"Recent bank collapses have not changed, heightened or accelerated the G-20's approach on framing global crypto regulation, it has only underscored our hesitancy," the person said.
India is currently the president of the G-20 and thus has agenda-setting power. It has the power to ask international bodies tasked with framing the global crypto rules to factor in recent bank collapses.
"The G-20 does not need to ask the [International Monetary Fund] and [Financial Stability Board] to factor the recent crypto bank collapses because such instability has already been taken into account," the person said, while adding the agenda setters are watching the developments closely.
The G-20 has tasked the Financial Stability Board (FSB) and the International Monetary Fund (IMF) to jointly come up with a global framework for crypto in the form of a synthesis paper.
The IMF had privately presented a report to the G-20 in February focusing on the "Macrofinancial Implications of Crypto Assets." The report made public on Monday revealed that the IMF had warned the G-20 that the widespread proliferation of crypto assets could lead to banks losing deposits and curtailing lending.
"This showcases how quickly a bank or a venture capital [firm] with excessive exposure of any sort can collapse and how prone it is to bank runs," the source said.
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