India’s Presidency of the G20 from December 1, 2022 to November 30, 2023 presents a unique opportunity for the country to lead the way in establishing global cryptocurrency regulations. With no existing consensus or frameworks in place, India can leverage its position to set standards and regulations for the use and trade of cryptocurrencies.
Establishing regulations for cryptocurrencies is crucial
Establishing regulations for cryptocurrencies is crucial for several reasons, including safeguarding consumers from fraud and other financial crimes. Cryptocurrencies are a new and mostly unregulated asset class, which makes them vulnerable to scams and other illicit activity. However, by setting policies and regulations for cryptocurrencies, policy makers can reduce the risk of such activities and protect consumers from financial losses.
Another important reason for cryptocurrency regulation is to increase stability and reliability in the cryptocurrency market. Due to their high volatility, cryptocurrencies’ value can fluctuate significantly over short periods, making them risky for investors and challenging for businesses to use them as a form of payment. By regulating cryptocurrencies, authorities can help reduce volatility and instill greater confidence in their use as a means of exchange.
Furthermore, crypto regulation is highly crucial to ensure that cryptocurrencies are used in a way that aligns with financial and economic policies, including tax compliance, and the prevention of money laundering and terrorism financing. By setting rules for the use of cryptocurrencies, authorities can prevent their misuse for illegal activities and integrate them into the broader financial system in a way that benefits all stakeholders.
G20 Summit 2023 may bring a global consensus around crypto regulations
G20 Summit 2023 presents a significant opportunity for the creation of a global consensus around crypto regulations, say experts from the Indian digital asset industry.
The Financial Stability Board (FSB), the International Monetary Fund (IMF), and Bank for International Settlements (BIS) are set to publish recommendations for a global crypto regulatory framework, with critical milestones including the FSB paper on crypto regulation in July 2023 and the Synthesis paper for the global policy approach for crypto in September 2023.
India will lead efforts in shaping global policy framework on crypto
Manan Vora, SVP of Strategy and Business Operations at Liminal, is optimistic about the future of the Indian digital asset industry, highlighting India’s position as the sixth-largest digital asset ownership country globally.
Vora believes that India will lead efforts in creating a robust policy framework for digital assets that will protect the interest of all stakeholders in the industry while creating new jobs and contributing to the country’s economy.
Tarusha Mittal, COO and Co-founder of UniFarm and Dapps, believes that India has the potential to be the blockchain capital of the world, given its robust technical infrastructure and skilled workforce.
Mittal urges policymakers to accelerate the creation of a strong and impartial policy to support the growth of the crypto ecosystem in India, emphasizing that Web3 is the tech of the future, and India cannot afford to be left behind.
Shivam Thakral, CEO of BuyUcoin, India’s second-longest-running digital asset exchange, emphasizes the need for immediate attention from policymakers to define crypto as a security/commodity/asset class, regulate fiat-pegged stablecoins, protect retail investors, introduce a licensing regime for crypto exchanges, and regulate companies involved in the business of digital assets.
Thakral suggests that India should adopt an industry-supporting stance to achieve the $5 trillion economy dream within this decade.
The Indian digital asset industry is looking at the G20 Summit with optimism, hoping that the policymakers will accommodate the aspirations of young entrepreneurs, users, and the entire workforce employed in the crypto and blockchain space. The G20 summit provides a unique opportunity for India to take the lead in creating a strong policy framework for digital assets while protecting the interests of all relevant stakeholders of the industry.