Nisha Sinha
September 12, 2023
With the growing risk and challenges posed by fast-paced developments in the crypto asset ecosystem, the Leaders of the G20 through the G20 New Delhi Leaders’ Declaration (adopted in New Delhi during the G20 Summit held from September 9-10, 2023) have endorsed the Financial Stability Board’s (FSB’s) recommendations for the regulation, supervision, and oversight of crypto-assets activities and markets and of global stablecoin arrangements. The G20 member nations also stressed for a global implementation of these recommendations in a timely and consistent manner by the FSB and the SSBs (Standard Setting Bodies) to prevent individuals/entities from taking undue advantage of relatively relaxed crypto regulations in some of such jurisdictions.
The G20 leaders also welcomed the synthesis paper (which contained the policies for crypto assets) including the roadmap issued by the International Monetary Fund (IMF) and the FSB that outlined the risks associated with cryptocurrencies and also laid out a comprehensive policy and regulatory framework. This framework considers various types of risks, including those specific to emerging markets and developing economies (EMDEs), and aligns with ongoing worldwide efforts to implement Financial Action Task Force (FATF) standards which are aimed at countering the risks associated with money laundering and terrorism financing. The Report on ‘The Crypto Ecosystem: Key Elements and Risks’ published by the Bank for International Settlements (BIS) was also welcomed by the G-20 Leaders. It is anticipated that the Finance Ministers of G20 member nations and Central Bank Governors will discuss the stance on crypto regulations in the meeting scheduled to be held in October 2023.
The G20 further called for the swift implementation of the Crypto-Asset Reporting Framework (‘CARF’) and asked the Global Forum on Transparency and Exchange of Information for Tax Purposes to create an appropriate and coordinated timetable for commencing exchanges amongst the relevant jurisdictions. It is noted that a significant number of these jurisdictions expressed their intention to begin CARF exchanges by the year 2027.
In essence, while the G20 Leaders (in the New Delhi Declaration), haven’t adopted a definitive unanimous regulatory framework for crypto-assets, the fact that the member nations took a forward step in this direction is in itself a positive development. It, of course, remains to be seen how soon can the G20 can move forward with the adoption of a definitive global robust framework for regulation of crypto-assets.
The Central Board of Direct Taxes (CBDT), vide Circular No. 13 of 2022
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