The topic of regulating crypto assets will be discussed at G20 meetings, according to India’s Finance Minister Nirmala Sitharaman, as a consensus needs to be formed on the subject.

“Crypto is heavily tech-led and less of human intervention. We are talking to all nations that if a regulation has to be framed then one country cannot frame it alone. So we are speaking to all to form a Standard Operating Procedure (SOP) so that it is effective. So all these are part of the discussion. The discussion process is on in G20,” Sitharaman told reporters to post her address to the RBI board in New Delhi.

For 2023, India will hold the G20 presidency. A key player in the governance of the global economy is the G20, a leading forum for international economic cooperation. Sitharaman has previously stated that India will push for global regulation of crypto assets to stop the funding of terrorism.

The minister listed eight topics for discussion during its G20 presidency, which began on December 1, including multilateral institution reforms and food and energy security. The recent failure of the cryptocurrency exchange FTX and the subsequent market sell-off have highlighted the crypto ecosystem’s weaknesses.

Because they lack any inherent cash flows, crypto-assets do not strictly meet the criteria for being considered financial assets. Instead, they are self-referential instruments. Bitcoin, Ether, and a number of other crypto assets are no longer considered securities by US regulators.

According to the most recent Economic Survey, the US Federal Reserve, the Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC) made a rare joint statement on January 3, 2023, outlining their concerns about the risks that crypto-assets pose to the banking system.

The global response to cryptos is developing, it had been stated, and the geographically diffuse nature of the crypto ecosystem necessitates a common approach to the regulation of these volatile instruments.

The market for crypto assets, which are novel digital asset classes implemented using cryptographic techniques, has, according to the survey, been incredibly volatile, with its total valuation varying from almost USD 3 trillion in November 2021 to less than USD 1 trillion in January 2023.

The unstable nature of the ecosystem, along with its growing complexity and lack of transparency, have been brought to light, according to the statement, by its instability.