A more comprehensive approach is being moulded by IMF and the Financial Stability Board to balance regulation and financial stability. This will involve dime form licensing of crypto issuers and intermediaries with coordinated disclosure requirements. Countries will have flexibility in tailoring their regulations to individual vulnerabilities to money laundering and terror finance. A similar approach to stability will deny cryptocurrency status as legal tender. But it will not be banned either. Financial stability measures will have to be customised according to economic parameters such as stages of development and globalisation.
Repeated US regulatory action against crypto exchanges should lend urgency to the global response. India has used its G20 presidency to align intentions. But there remains a lot of ground to be covered on policy action. Countries have a wide spectrum of views on how to unbundle the transaction and speculative elements of cryptos. Some, like India, are piloting fiat digital currencies, which should, apart from deterrent taxation, leave less room for crypto speculation. But it has been prominent in highlighting the inadequacy of unilateral regulation and the need for a speedy multilateral response. Spectacular blowouts in the crypto world are buttressing its argument.
