G20 Finance Chiefs Widely Recognize Crypto Poses Major Financial Stability Risks, Says Indian Central Bank Governor

G20 finance ministers and central bank governors acknowledge that cryptocurrencies pose serious risks to financial stability, monetary systems and cybersecurity, India’s central bank governor said. Cryptocurrency regulation was one of the key topics discussed at the G20 meeting over the weekend.

G20 Agrees Cryptocurrency Poses Serious Financial Stability Risks, RBI Governor Says

Reserve Bank of India (RBI) Governor Shaktikanta Das spoke about cryptocurrencies during a media briefing on Saturday following a meeting of G20 finance ministers and central bank governors in Bangalore. According to India’s state news agency News On Air:

Das told the media that it is now widely accepted that cryptocurrencies or assets pose a serious risk to financial stability, monetary systems, and cybersecurity.

Das also noted that G20 delegates have expressed interest in central bank digital currency (CBDC) pilot projects in India and other countries, the publication reports. The Central Bank of India launched its digital rupee pilot projects in November and December last year.

During a media briefing at the conclusion of the G20 finance ministers and central bankers meeting, Indian Finance Minister Nirmala Sitharaman said there is an almost clear understanding that anything that is not backed by a central bank is not a currency. She stressed that this is a position that India has taken for a very long time.

During the G20 meeting, India asked the International Monetary Fund (IMF) and the Financial Stability Board (FSB) to prepare a joint paper on crypto to help formulate a “comprehensive” crypto policy. IMF Managing Director Kristalina Georgieva called for increased regulation of cryptocurrencies, emphasizing that the ban should not be removed from discussion. Moreover, the IMF Executive Board recently published guidance on developing effective crypto policies.

The RBI has repeatedly stated that cryptocurrencies not backed by a central bank should be completely banned. However, India’s finance minister has previously said that a ban or regulation will only be effective if implemented in cooperation with other countries. U.S. Treasury Secretary Janet Yellen said the U.S. did not propose an outright ban on crypto activities, but emphasized that it is “extremely important” to create a strong regulatory framework for crypto.

Meanwhile, delegates from over 200 jurisdictions recently met and agreed on the timely implementation of the Financial Action Task Force (FATF) standards for cryptocurrencies.

What do you think about G20 finance ministers and central bankers agreeing that cryptocurrencies pose serious financial stability risks? Let us know in the comments below.