The G20 leaders were pragmatic enough and had foresight to see what a threat crypto assets posed to mainstream financial markets. The leaders were in favour of globally co-ordinated crypto regulations. They were also in favour of Reporting Framework for crypto assets, They want to have crypto exchanges for different jurisdictions as per co-ordinated timeline. They want oversight of crypto assets.

It is now clear that none of the G20 countries is inclined to give cryptos a legal tender status.

Cryptos, as we know, are decentralised digital assets. They have the potential of being misused. In fact, they have already been misused. However, this does not rob them of their convenience as safe haven for the investors. As we know, even regulated assets do not exhibit orderly behaviour.

In 2022, there was a crash of an FTX exchange, and Bitcoin suffered heavy losses. Later in 2023, there was resurgence. Regulation of crypto assets is not to legitimize them, but to minimise the risks and to respond quickly in the face of the risk.

G20 directions will accelerate the formulation of the regulatory framework. The RBI in India is in favour of banning the cryptos. It is at the instance of Supreme Court in 2020 that banking facilities have been provided to crypto exchanges. Policy makers want to provide an alternative digital currency (CBDC) here in India. That cannot rule out the co-existence of private cryptos along with the official digital currency.

Dollar has been the reserve currency of the world. Blockchain based currency might dent the dollar’s position as the only currency to settle global payments.

Emerging economies such as India are likely to benefit in cross-border settlements in their own currencies to counter dollar’s pre-eminence.