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.

AccessTimeIconMar 13, 2023 at 3:55 p.m. UTC
Updated Mar 13, 2023 at 5:13 p.m. UTC

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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Amitoj Singh is CoinDesk's regulatory reporter covering India. He holds BTC and ETH below CoinDesk's disclosure threshold of $1,000.

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