US Pushes Balanced Regulatory Strategy for Digital Assets and AI at G20 Summit

• Treasury Secretary Scott Bessent emphasized that clearer regulatory frameworks would significantly foster the growth of the digital asset sector during the two-day G20 Innovation Ministerial summit.
• Meanwhile, White House tech adviser Michael Kratsios advocated for a lighter regulatory touch on AI to stimulate innovation.

The G20 Innovation Ministerial summit commenced on Tuesday, with the United States urging its trade allies to adopt a more proactive stance in strengthening financial innovation through clear regulatory guidelines. At the same time, it recommended a hands-off approach to artificial intelligence (AI) to avoid impeding its progress.

Held in Asheville, North Carolina, the event marked the United States’ assumption of the rotating presidency of the international forum. Under this leadership, President Donald Trump will host the annual meeting in Miami, Florida, this December.

Treasury Secretary Scott Bessent delivered a keynote address on digital assets to attendees of the two-day G20 meeting, which brought together central bank governors and finance ministers. Subsequently, White House Office of Science and Technology Policy Director Michael Kratsios spoke on matters related to AI governance.

Clearer Path to Digital Asset Regulation

Addressing digital assets first, Bessent underscored the sector’s potential to drive “broad-based economic growth.” However, he noted that these benefits must be balanced with appropriate safeguards to maintain financial stability and trust in the monetary and payment systems during this period of transformation.

The Treasury Secretary pledged to advance responsible and effective regulatory and supervisory frameworks that enforce such safeguards while establishing clear pathways for sound innovation in digital finance and digital assets. Additionally, he voiced support for the Financial Stability Board’s (FSB) ongoing initiatives to address vulnerabilities inherent in cross-border stablecoin arrangements.

Bessent also encouraged member nations to adopt a harmonized ISO 20022 data model. This measure is designed to facilitate more efficient and secure settlement rails while extending the operating hours of large-value cross-border payment systems.

Hands-Off Approach to AI

Regarding AI, Kratsios urged G20 allies to focus on establishing rules for “novel” situations involving the technology rather than drafting additional regulations that could create complications. He referenced the “light touch” framework on AI as the “Carolina Principles.”

Beyond advocating for fewer regulations, the Trump administration’s tech adviser discouraged the creation of dedicated agencies for AI oversight. Instead, he recommended concentrating efforts on boosting research and commercial support for the industry and other emerging technologies.

Kratsios argued that stringent rules could hinder progress in the sector by restricting developers and enterprises from releasing new models. Such restrictions could also limit companies’ ability to promptly address vulnerabilities in their AI systems.

SpaceX CEO Elon Musk, Meta CEO Mark Zuckerberg, and Google DeepMind Chair Demis Hassabis also addressed the group via video conference, highlighting the importance of more flexible regulations for AI.

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