G-20 and Crypto-Currency Regulation
If the list of doable issues which consume a lesser timeline is taken separately, then more than expected can be achieved by G-20 in a year. — Alok Singh
Bharat has got the responsibility to lead the G-20 from 1 December 2022 to 30 November 2023. This group started as G-7 and today it is G-20. The necessity of a new organization to manage the global economic and financial system to avoid any global economic and financial crisis was accepted as the existing organizations such as World Bank (WB), International Monetary Fund (IMF), and the World Trade Organization (WTO) were ineffective to accomplish the committed intended goal. The immediate trigger was a sequence of economic and financial crises starting from the Mexican Peso crisis of 1994, Asian financial crisis of 1997, Russian financial crisis of 1998, and impacting the American hedge fund resulting in the collapse of Long-Term Capital Management (LTCM). LTCM was founded in the year 1994 and it is surprisingly said that the LTCM was incorporated by those people who were successful in the classroom but failed in the boardroom. The board member and co-founders of LTCM included Dr. Myron Samuel Scholes and Dr. Robert C. Merton who together received the Nobel Memorial Prize in Economic Sciences of the year 1997. The four-year story is that the LTCM was founded in 1994, the co-founders of LTCM received Nobel Prize in 1997 and the LTCM collapsed in 1998. The shelf life of international organizations is diminishing at a faster pace. The fault line is in policy making and cooperation.
The G-20 meetings have highlighted the issue of regulating cryptocurrency. We should be very careful in demanding that international regulatory bodies regulate the transaction behavior using cryptocurrency. The developed countries, particularly the technologically developed countries can come up with their own regulatory technology to control the behavior of crypto exchanges and the role of the behavior of crypto-currency in economical distortion and financial distortion. But in case we lag behind in coming up with our own technology to regulate cryptocurrency then the expected cooperation from developed nations of G-20 or any nation of the group that succeeds in developing a control and regulation mechanism can be a disappointment. We have already faced disappointments in WTO and other international organizations.
The latest crisis which the whole world faced is the COVID-19 pandemic. We need to replicate the success of pandemic management in crypto- currency-management. We should remember that had we been not able to develop our own Covaxin - developed and manufactured by Bharat Biotech, then what would have happened? The world listened to us as we gave the world the free vaccine and earned vaccine diplomacy. We cared for the world but the world didn’t care for anyone. We were lucky to have a leader who had trust in our own human resources, working in our own motherland and for our own companies, those who could match the timeline of the Covid-19 vaccine deadline as that of the other greedy big pharmaceutical companies and better-equipped world universities could do. The scope of international organization like the World Health Organization and the United Nations were hopeless, and could do nothing and was literally ineffective in persuading the other or expected early developer of the Covid-19 vaccine to share the vaccination technology or to temporarily waive the patent. We rescued the world. Our own ‘Covaxin’ demolished the monopoly of the Covid-19 vaccine and saved the human civilization of the world.
Nothing substantial was contributed by international organizations during the pandemic of Covid-19 on the humanitarian ground when the world was dying. We can easily extrapolate the experience of Covid-19 experience to address the already-arrived crypto-currency disruptions. We saved the world then, as we had Covaxin as well as we had CoWin. Covaxin is the product while Cowin is the logistics platform. We should note that without ‘CoWin’, ‘Covaxin’ could not succeed. The planning was meticulous and the world is surprised and the global citizens thanked us. We need the same level of commitment to address the crypto-currency disruptions.
We expect the leadership to encourage with urgency our universities and technology companies to bail out our outdated regulators with a control and regulation mechanism which could demolish the disruptions of crypto-currency to our economic and financial system. It’s very difficult to stop a technology to arrive, the crypto-currency technology has arrived and we should engage our energy to develop regulatory mechanisms. It’s foolish to expect that another nation of the G-20 will share with any other nation of the G-20 the mechanism to regulate and control crypto-currency. We have to lead and provide the solution to the sovereign nations the means, ways, processes, and mechanisms to control and regulate the crypto-currency. Meanwhile, a temporary ban is the only alternative.
The international priority list is of regulating crypto-currency but in the chairmanship of our country, the G-20 forum can achieve a lot that we have to offer to the world and can be achieved during the leadership of our country. It is difficult to stop an idea or technology whose time has arrived, and is beneficial to mankind; the unpreparedness of regulators is a tough excuse to discourage such ideas. The solution lies in preparing the regulators to match the expertise of technological disruptions by following proper policy and sensing the urgency. During Covid-19 we did it and in cryptocurrency, we can repeat the success, proper discussion, appropriate policy, and sufficient encouragement are needed. Our hidden human resource is capable enough. Politicians and bureaucrats need to have the knowledge to face the challenges of techno-savvy world where the product life of disruptive technology itself is getting lesser and lesser.
The acceptance of Ayurveda as a mainstream part of medical tourism can follow, as the acceptance of Yoga is an accomplished goal. This platform can be engaged to encourage organic and traditional farming worldwide. The one earth one family which is our idea motivates us to own the responsibility to discourage the commercialization of food we eat and get support from G-20 nations to discourage the promotion of Genetically Modified and ultra-processed foods. These practices are inclusive components of having responsible behavior towards climate and environment.
There are many issues that can be addressed in the short time frame of one year, and we should be careful that in the aim of striking the bigger issues the smaller but doable issues are not lost. If the list of doable issues which consume a lesser timeline is taken separately, then more than expected can be achieved by G-20 in a year.
(Alok Singh is a Fellow of the Indian Institute of Management Indore, a freelancer academician, and associated with AGET Business School, Jhajjar.)
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