Members of the intergovernmental G20 forum have come to a common consensus to develop a global framework for regulating Bitcoin and cryptocurrencies.
Global leaders including U.S. President Joe Biden, French President Emmanuel Macron, Indian Prime Minister Narendra Modi, and other heads of state who were present at the G20 Summit 2023 held in New Delhi, India, have endorsed a game-changing crypto policy recommendation by the global Financial Stability Board (FSB).
This comes after the U.S. Federal Reserve warned that the Bitcoin and crypto markets could be headed for a $1.2 trillion price ‘death cross’, that could massively curtail the entire sector.
G20 Heads Of State Agree On Global Framework For Regulating Bitcoin And Crypto Assets
On Sunday, leaders of 20 of the largest economies, also called the G20, signed a declaration in New Delhi stating that they collectively endorse the FSB’s “high-level” recommendations for the “regulation, supervision, and oversight” of crypto assets, their related activities, markets, and arrangement of fiat-based stablecoins.
Earlier last week, the FSB and the International Monetary Fund (IMF) provided a synthesis paper to all G20 members proposing methods in which they could regulate crypto assets within their jurisdictions.
The report highlighted that cross-border cooperation and information sharing regarding Bitcoin and other cryptocurrencies was necessary among the G20, warning that a blanket ban on crypto assets would not be logical as it could be costly and difficult to enforce due to the decentralized nature of the instruments in question.
New Rules Would Require Crypto Service Providers To Share Cross-Border Transaction Information
The new rules would require Bitcoin and cryptocurrency trading platforms and crypto companies to share information on cross-border crypto transactions with relevant financial authorities in their respective jurisdictions beginning in 2027.
The report also highlighted that cryptocurrencies should not be granted official currency status or considered a legal tender under any circumstances, and advised global central banks to avoid holding crypto assets under their reserves.
In 2021, El Salvador became the world’s first country to make Bitcoin a legal tender and also legalized fund transactions in all cryptocurrencies. The risky but far-sighted move was criticized by the IMF and other financial institutions.
At the G20 New Delhi Summit 2023, held on September 9 and 10, the leaders of the U.S., U.K., India, China, Japan, and the E.U. also called on implementing a “swift crypto-asset reporting framework” that would give tax authorities greater visibility over crypto transactions involving Bitcoin and other blockchain-based assets and information about the individuals or entities behind them.
India Says Global Cooperation Required To Properly Regulate Cryptocurrencies
Speaking to Reuters prior to the summit, India’s finance minister Nirmala Sitharaman said that under the country’s presidency, the government had put several key issues on the table related to regulating or understanding the need for a framework to handle issues related to crypto assets. She also stated that it would not be possible to properly regulate the asset class without global cooperation.
The next step in the roadmap for adopting the regulatory proposals will be discussed by the G20 finance ministers and central bank governors in a meeting scheduled to be held in October 2023.
Bitcoin (BTC), which had seen an uptick in prices over the past couple of weeks after the favorable ruling in the Grayscale vs. SEC lawsuit, struggled to maintain its momentum. The apex cryptocurrency is currently trading at $25,661 – down 0.6% from its previous day’s price.
Meanwhile, Ethereum (ETH) is also struggling to hold on to last month’s gains. The world’s second-largest cryptocurrency by market capitalization is trading at $1,588 – down over 2% from its price from the previous day.
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