During the G20 summit held in Bengaluru, India, member countries discussed the policy that should be adopted regarding crypto assets and their associated risks. Moreover, they addressed the issue of non-bank financial intermediation (NBFIs) and backed global policy actions to increase NBFIs resilience.
The document, written after the First G20 Finance Ministers and Central Bank Governors Meeting, highlighted the ongoing work the FSB and the international regulators are doing ”to ensure that the crypto-assets ecosystem, including stablecoins, is closely monitored and subject to sound regulation, supervision, and monitoring to mitigate potential risks to financial stability.“
The G20 Finance Ministers and Central Bank Governors welcomed the IMF discussion paper on the macro-financial implications of crypto assets and added: “We look forward to the IMF-FSB Synthesis Paper which will support a coordinated and comprehensive policy on crypto-assets from a macroeconomic and regulatory perspective, including the full range of risks posed by crypto assets.”
Moreover, member countries took note of the G20 seminar on Policy Perspectives: Debating the Road to Policy Consensus on Crypto Assets.
In turn, they welcomed the contribution of the FSB and regulatory agencies regarding NBFIs' vulnerabilities from a systemic perspective. “We strongly support global policy actions to increase NBFIs resilience. Besides we look forward to the FSB’s recommendations on how to deal with structural liquidity mismatches in open-ended funds, and the risks of hidden leverage.”
During the summit, the President of the BCRA, Miguel Ángel Pesce, welcomed the intense debate regarding the policy to be applied to crypto assets, and warned off the high level of risk that these assets entail. “We welcome the fact that we are having a deeper and broader debate on policy actions for crypto assets”, he pointed out during his participation in the panel: Financial sector and financial inclusion. “We should remember that crypto assets are transacted in a decentralized environment and on an anonymous basis. Then, they cannot be traced and, in general, they are not secured by underlying assets.” He went on saying: “We should treat them as if they were a sort of gambling, and in that sense, our objective should be to isolate their effects from the traditional financial system. We should focus on bridging data gaps to ensure that monitoring is effective,” he concluded.
As regards NBFIs, he said: “we need to reduce their procyclicality and be aware of their amplifying effects and interconnections.” He continued to say that “we need to replicate in NBFIs the work done on banking regulations based on the strengthening of the Basel standards, which proved to be successful after the COVID-19 crisis.” Finally, there was also room for discussing some aspects related to cyber resilience and operational resilience taking into account all participants in the global financial system.
The Chair Summary and Outcome Document of the First G20 Finance Ministers and Central Bank Governors meeting is available (in English) on this link.
March 4, 2023