RBI wants G-20 to prioritize macro risks of crypto
The Reserve Bank of India (RBI) has stated in its annual report, published on Tuesday, that it is attempting to broaden the conversation around cryptocurrencies beyond just “financial stability and integrity” to include the wider implications and risks of crypto-assets on the global economy. This move is believed to be an effort to draw attention to how cryptocurrencies can affect and potentially change the global economy, rather than just nations and their individual customers. Government sources have previously indicated that the RBI’s aim is to become a key player in the current global conversation surrounding global crypto rules. While reiterating concerns that “cryptocurrencies are a material threat to financial stability,” this is the first time that the RBI has articulated its “intent” as an important stakeholder in this conversation. India currently holds the presidency of the Group of 20 (G-20) nations, which gives it the power to set the agenda. The RBI assists the Finance Ministry in shaping this agenda. The Finance Minister has previously stated that regulating crypto assets should be an international priority and will be a big topic of discussion during India’s G-20 presidency. In February, India announced that coming global crypto rules will be based on a new synthesis paper jointly produced by the International Monetary Fund (IMF) and the Financial Stability Board (FSB). The FSB sets international standards around global financial stability and is expected to publish its individual recommendations for regulating crypto and stablecoins in July 2023. “The intent of India’s Presidency is to expand the G-20 crypto asset narrative beyond financial stability and financial integrity concerns to capture the macro-financial and cross-sectoral implications and risks of crypto assets,” the RBI annual report said. The report also revealed that the central bank is prioritizing the discussion on CBDCs “with a focus on their macro-financial implications.” India’s ongoing retail and wholesale CBDC pilots will be expanded by “incorporating various use cases and features” to more than the current 15 cities and 13 banks, the report said. The retail CBDC pilot began in Dec. 2022 and by April it had onboarded more than 100,000 customers, with the ambition to take that number to a million by July.
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Edited by Parikshit Mishra.