Reserve Bank Of India Seeks To Leverage G-20 Presidency To Propel Global Crypto Regulation Conversation

The Reserve Bank of India (RBI) has expressed its intent to broaden the global discourse on cryptocurrencies, aiming to go beyond just "financial stability and integrity" and delve into the "macro-financial and cross-sectoral implications and risks of crypto-assets."

This strategy is perceived as an attempt to shed light on the potential impacts of crypto on the global economy as a whole, instead of merely focusing on individual nations and consumers. 

In its latest annual report published on Tuesday, the RBI has explicitly stated its role and ambitions in shaping the global conversation on cryptocurrency regulations.

Despite this, the central bank maintained its position that cryptocurrencies pose a substantial risk to financial stability.

As India presently presides over the Group of 20 (G-20) nations, it holds significant influence in setting the global agenda.

The RBI assists the Finance Ministry in forming this agenda.

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Nirmala Sitharaman, the Indian finance minister, emphasized at the beginning of India's presidency that regulating crypto assets should be a global priority, and this would be a major topic of discussion during its G-20 presidency.

India revealed earlier in February that the upcoming global crypto regulations would be largely based on a synthesis paper co-authored by the International Monetary Fund (IMF) and the Financial Stability Board (FSB).

The FSB, responsible for setting international standards concerning global financial stability, is projected to release its individual suggestions for regulating cryptocurrencies and stablecoins by July 2023.

The RBI's annual report revealed that the bank aims to widen the narrative on crypto-assets under the G-20 presidency beyond the usual concerns of financial stability and integrity, to encapsulate the macro-financial and cross-sectoral implications and risks.

The report also indicated a heightened focus on the debate around Central Bank Digital Currencies (CBDCs) and their macro-financial implications.

India's ongoing CBDC pilots for retail and wholesale segments will extend to more cities and banks, "incorporating various use cases and features," the report said.

The retail CBDC pilot, launched in December 2022, had successfully engaged over 100,000 customers by April, with plans to scale that number to one million by July.

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