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India is poised to establish its position on digital assets in the coming months, following a comprehensive examination of the international consensus on cryptocurrency regulations. A senior official from India’s Finance Ministry revealed this plan during discussions held on the sidelines of the recent G20 leaders’ summit.
Ajay Seth, Secretary of the Department of Economic Affairs, provided insight into this impending decision, stating, “The G20 has laid the groundwork for a risk assessment framework. Now, we will assess our own stance in the context of the global agreement among leaders to standardize crypto regulations in the near future.”
Seth’s remarks underscore the substantial progress made within the G20, with prominent organizations such as the International Monetary Fund (IMF), Financial Stability Board (FSB), Financial Action Task Force (FATF), and the Bank for International Settlements (BIS) collaborating to establish a comprehensive policy framework for evaluating cryptocurrency-related risks.
Importantly, there has been an endorsement of previous initiatives aimed at regulating stablecoins and unbacked crypto assets. This endorsement encompasses the formulation of high-level principles and regulations tailored to this specific category of digital assets.
Addressing the complexities associated with banning virtual currencies, Seth added, “If you want to ban it (crypto), go ahead and ban it. But if other nations are not implementing bans, it will be exceedingly challenging for one country to do so.” Instead, he stressed the need for a consensus among nations to at least adopt the “minimum” regulatory standards outlined in the IMF-FSB paper.
G20 Leaders Embrace IMF-FSB Synthesis Paper on Cryptocurrencies
Earlier this week, the International Monetary Fund (IMF) and the Financial Stability Board (FSB) released a policy paper at the request of India’s G20 Presidency. This paper discouraged an outright ban on crypto-assets and suggested the implementation of a licensing system for crypto-asset platforms, subjecting them to anti-money laundering and counter-terrorist financing standards.
The G20 leaders have officially endorsed the IMF-FSB synthesis paper on cryptocurrencies, and member nations are set to engage in more extensive discussions during the upcoming World Bank Group-IMF Annual Meeting in October. These discussions aim to define specific parameters for a global regulatory framework.
As India prepares to determine its course of action regarding cryptocurrency regulation, the global crypto community closely watches. The forthcoming decision in the coming months carries significant implications for India’s role in the evolving landscape of digital assets.