RBI Governor Reveals That G20 Members Consider a Total Ban on Crypto3-min read

Ali Raza

Ali Raza |  Updated on 08/3/2023

As February 2023 came to a close, one of the most anticipated events in the financial industry — the G20 meeting — took place. According to Shaktikanta Das, the acting Governor of the Reserve Bank of India (RBI), digital currencies were a heavily addressed topic. However, he revealed that multiple G20 members were considering banning digital assets rather than regulating them or legalizing them.

The G20 Is Open to Crypto Technology, But Refuse to Recognize Crypto as a Currency

The RBI Governor commented on the two-day meeting of G20 nations that took place in Bengaluru, stating that the crypto industry was one of the main topics of conversation during the meeting. The discussions included several proposals, including the possibility of developing an international architecture for digital asset regulation.

The participants, including finance ministers and central bank governors, considered a joint technical paper that would serve as a basis for all other members interested in establishing strong but flexible crypto rules. India itself wanted to spearhead the creation f such a document in collaboration with the International Monetary Fund (IMF) and the Swiss Financial Stability Board (FSB).

The idea was to create a paper that would synthesize macroeconomic and regulatory perspectives on digital currencies and in doing so, help develop policies for the crypto space. According to Nirmala Sitharaman, Indian Finance Minister, who led the briefing, G20 members are aware of the potential that the crypto industry’s underlying technology has to offer. Blockchain technology and its products could become extremely useful for the evolution of financial technology, including better security, faster transactions, immutability, and more.

However, the member nations have a problem with cryptocurrencies themselves. According to Indian officials, the member nations are not willing to accept crypto assets as actual currencies. To them, any asset that was not issued by a central bank is not, and cannot be, a currency.

Countries Will Respect the Decisions Made at G20 Meetings

Sitharaman noted that side events are proposed on cryptocurrencies at the IMF-World Bank Spring Meeting, scheduled to take place in Washington this April. The FSB’s crypto regulatory paper itself, however, is expected to be tabled in July

The idea is to use the IMF-FSB paper to create a basis for any and all future discussions involving the development of international architecture on digital assets. Das revealed that the discussions were still ongoing, and the paper is currently a work in progress.

He did point out that each country operates as a sovereign country. As such, they are free to make their own decisions. However, typically, once a decision has been made at the G20 meeting, it is expected that the countries will agree to it and follow the propositions that they agreed on.

The RBI Governor Das noted that the meeting has shown that G20 countries have wide recognition and acceptance of crypto technology. However, they also view cryptocurrencies as a risk to financial stability and monetary systems.