With India on the brink of releasing its much-anticipated discussion paper on crypto-assets, the regulatory landscape is entering a decisive phase. Earlier, under India’s G20 Presidency, global standard-setters took a significant step toward alignment with the release of the IMF-FSB Synthesis Paper on Policies for Crypto-Assets — now widely regarded as the most comprehensive global framework for addressing the risks and challenges posed by the crypto ecosystem.
This paper doesn’t propose new rules. Instead, it consolidates the best of existing guidance—spanning the IMF, FSB, FATF, IOSCO, and BIS—into a coherent roadmap for global implementation, including 9 high-level recommendations and a phased timeline through 2025. The synthesis paper sends a clear signal to policymakers: comprehensive regulation and continuous supervision of crypto-assets are now non-negotiable. It outlines key macroeconomic and financial risks posed by crypto-assets, while explicitly warning against blanket bans, which are costly, ineffective, and prone to backfire through regulatory arbitrage and cross-border spillovers.
Instead, the global approach now favours clear licensing frameworks, consistent risk-based regulation, and data-driven supervision—principles that can and should shape India’s own strategy.
Key takeaways from the ‘Synthesis Paper’
1. Addressing macroeconomic and fiscal risks
India must consider how crypto-assets may impact its monetary sovereignty, particularly with the rise of foreign-denominated stablecoins. The paper highlights how unregulated crypto adoption in vulnerable economies could erode central banks’ ability to manage monetary and fiscal policy.
2. Building a sound financial stability framework
The synthesis paper draws on the painful lessons of recent market failures—from FTX to Terra—and calls for robust oversight of crypto-asset service providers, especially those offering multiple functions like trading, custody, and issuance.
3. Tackling regulatory arbitrage through global consistency
One of the most important principles outlined is “Same Activity, Same Risk, Same Regulation.” Without consistency, crypto firms will simply migrate to friendlier jurisdictions, leaving loopholes in enforcement and harming investors.
This is an opportunity for India to champion regulatory interoperability, aligning domestic norms with global standards while tailoring rules to local conditions such as capital controls, financial inclusion, and investor education.
4. Strengthening legal foundations and market conduct rules
The paper notes that fragmented legal classifications of crypto-assets complicate enforcement and investor protections. For India, this is a call to modernise private law, clarify asset definitions, and establish legal protections for ownership, contracts, and insolvency.
It also points to the urgent need to enforce market integrity standards, particularly to combat manipulation, insider trading, and mismanagement in vertically integrated crypto platforms.
5. Prioritising environmental and AML/CFT safeguards
Environmental concerns and financial integrity risks—especially around pseudonymous transactions, privacy coins, and mixers—are given prominence. India can lead by institutionalising FATF compliance, expanding the enforcement of the travel rule.
The implementation roadmap outlined in the synthesis paper spans supervisory coordination, data gap reduction, global outreach, and jurisdictional cooperation, with key milestones in 2025. India is uniquely positioned to set the tone for the Global South, shaping rules that balance innovation with stability.
We believe India’s forthcoming discussion paper must reflect this global maturity while addressing domestic realities. That means:
- Clear tax rules aligned with the OECD’s Crypto-Asset Reporting Framework (CARF).
- Tiered regulatory obligations based on risk and function.
- Inter-agency coordination to reduce friction between financial, capital market, and enforcement regulators.
- Support for innovation through regulatory sandboxes and forward-looking experimentation.
The global conversation has moved beyond the binary of “ban or embrace.” It is now about governing with foresight, regulating with flexibility, and innovating with accountability.
As the Indian government prepares to release its own consultation paper, this is a critical opportunity for industry, academia, Web3 entrepreneurs, and policy enthusiasts to contribute meaningfully. The IMF-FSB Synthesis Paper is rich in content and nuanced in its recommendations. It deserves to be studied in full.
We urge all stakeholders to actively participate in the upcoming consultations by submitting well-researched, constructive, and forward-looking feedback. The clarity and quality of these contributions will directly influence the shape of India’s regulatory framework—helping ensure that it protects consumers, fosters innovation, addresses the risks and integrates seamlessly with global standards.
