Thursday, Sept 7, 2023

today, it's all about the G20, and why its crypto regulation coordination doesn't matter much

“That men do not learn very much from the lessons of history is the most important of all the lessons of history.” – Aldous Huxley  ||

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WHAT I’M WATCHING

The G20’s crypto hand-wringing is not significant

This weekend kicks off the G20 summit in India, which will apparently deliver consensus agreement on the need for stricter global regulation on crypto assets, according to a report yesterday in The Hindu.

Why this matters:

On the one hand, this is a big deal in that key global regulators are working on constructing a coordinated framework for crypto regulation. This acknowledges three key features of crypto assets:

1 – they are global: a bitcoin in Bengaluru is exactly the same as a bitcoin in Seattle.

2 – they can cross borders easily and without detection: the impact on capital flows understandably trigger a desire to monitor this, hence the drive for cooperation.

3 – they are here to stay: banning them is no longer an option, so, from the authorities’ point of view, control is the next best thing.

On the other hand, the parties behind the initiative highlight some fractures underlying the apparent cohesion, as well as the shifting allegiances of global politics. This makes the fuss and the focus more noise than substance.

India

Let’s start with India, which has long been calling for global coordination on crypto regulation. When it assumed presidency of the G20 in December of last year, it made crypto coordination one of the priorities of its mandate and statements throughout the year have reiterated this focus.

But India is not exactly crypto-friendly.