After the recent shocks experienced in the cryptocurrency market, India’s Finance Minister Nirmala Sitharaman stated that India’s G20 chair wants to create a standard framework for all governments to deal with risks related with cryptocurrencies. Diversified measures, according to Sitharaman, won’t help address the worldwide spread of cryptocurrencies.
A worldwide framework being developed by the G20 will assist its members in managing any risks associated with their crypto-related business. To this purpose, all countries must support the notion of creating a worldwide crypto policy, according to the intergovernmental group’s president led by India.
Sitharaman discusses the numerous ecosystem failures of 2022 in her address at the Peterson Institute for International Economics in Washington, DC, focusing in particular on the collapse of the FTX exchange. She stated that, “Cryptocurrencies are a very important part of the discussion under the G20 India presidency, given so many collapses and shocks in cryptocurrencies. We seek to develop a common framework for all countries to deal with this matter.”
The collapse of FTX and its dispute with Binance last year caused a significant market sell-off and decreased liquidity. This incident made the world aware of this asset class’s vulnerability since they lack any underlying value.
Hyperinflation and financial hardship are also of concern to the G20. In accordance with this, Sitharaman disclosed that the G20 also has an eye on uniting the world’s economy. The goal is to overcome hyperinflation and financial hardship, particularly in nations like Ghana and Sri Lanka who have modest economies with middle to low income.
She also added that, “In G20, there is an opportunity for India to bring all countries together to address debt distress in middle-income and low-income countries. Multilateral institutions are coming up with resolutions for debt-laden countries in 3 to 5 years’ time.”
By November 30, India’s G20 presidency is anticipated to end. Therefore, the committee still has around seven months to develop a worldwide crypto architecture. Additionally, it is anticipated that the framework will apply to all countries.
Bitcoin has allowed El Salvador to lessen its reliance on the US currency and hyperinflation. The unified payment interface in India has also seen active growth. One such success that UPI has delivered is the recent integration of UPI with Singapore’s PayNow rapid payment system, which enables quick cross-border payments. Therefore, Cryptocurrency even with its flaws is not completely to be discarded as it helps such countries to have a solid stance rather than totally depending upon the US Dollar.
