Some members said crypto ban should be considered, says RBI Governor Das

Some members of the G20 said during this week’s discussions that a complete ban on crypto should be considered, Reserve Bank of India (RBI) Governor Shaktikanta Das said.

“There were opinions expressed saying that the option of a ban or prohibition should also be considered,” Das said in Bengaluru on February 25 at the conclusion of the two-day meeting of finance ministers and central bank governors.

Moneycontrol had reported earlier on February 25 that finance ministry officials and central bankers from G20 countries were seemingly in agreement on regulating crypto assets, with a complete ban on them also on the table.

As part of this week’s G20 meetings, India has proposed a joint technical paper by the International Monetary Fund (IMF) and Switzerland-based Financial Stability Board (FSB). This paper, as per a government statement, would “synthesise the macroeconomic and regulatory perspectives of crypto-assets” to help formulate policies for the crypto space.

Finance Minister Nirmala Sitharaman, who led the media briefing, said there was “almost a clear understanding” that anything issued by an entity other than the central bank was not a currency, although G20 members also recognised that the technology underpinning crypto is useful for financial technology.

Sitharaman also said that side events are proposed on crypto assets at the IMF-World Bank Spring Meetings in April in Washington. Further, in July, the FSB’s paper on crypto assets regulation will be tabled so that it could be discussed at the next meeting of the finance ministers and central bank governors, to be held in Gandhinagar.

The IMF-FSB synthesis paper will be submitted in September, she added.

An ongoing discussion

The aforementioned synthesis paper of the IMF and FSB will form the basis for future discussions to develop an international architecture on crypto, Das said.

“But this a work in progress. Let us see wait for the discussions to go forward and we will see how it shapes up,” Das said.

“In any case, ultimately, every country is a sovereign country. The countries will take their decisions. But once something is agreed in the G20, naturally it would be expected that countries would by and large follow whatever is the agreed position.”

The RBI governor said the G20 discussions showed there was wide recognition and acceptance of the fact that crypto was a major risk to financial stability and monetary systems with attendant cyber security issues.

India is looking to build an international consensus on crypto regulation, with the argument being that only a global collaboration would be effective given the cross-border scale, scope, and challenges presented by crypto.