India’s finance minister, Nirmala Sitharaman, has emphasized the importance of crypto regulation as part of the discussion by the G20 countries during her official visit to the U.S. Sitharaman is representing India at the G20 Finance Ministers and Central Bank Governors meetings on the sidelines of the IMF-World Bank Spring Meetings. She discussed a wide range of topics during her trip, including cryptocurrency regulation. At a roundtable discussion titled “Investment Opportunities for the Long Term: India on the Rise,” the Indian finance minister emphasized that the regulation of cryptocurrencies is a key topic being discussed by the G20 nations under India’s presidency.
The Ministry of Finance recently told India’s parliament that cryptocurrency is currently unregulated, noting that “crypto assets are by definition borderless and require international collaboration to prevent regulatory arbitrage.” India’s central bank, the Reserve Bank of India (RBI), has repeatedly recommended that the Indian government ban all cryptocurrencies, including bitcoin and ether. In February, RBI Governor Shaktikanta Das said that the G20 finance chiefs widely recognized that cryptocurrency poses major financial stability risks. However, the government has stated that both regulating and banning cryptocurrencies would require collaboration on a global scale.
During the last meeting of G20 finance ministers and central bank governors, the government requested the IMF and the Financial Stability Board (FSB) to prepare “a synthesis paper” on crypto assets. Sitharaman stressed that the regulation of cryptocurrencies is a key topic being discussed by the G20 nations under India’s presidency. She stated: “Cryptocurrencies are a very important part of the discussion under India’s G20 presidency, given so many collapses and shocks in cryptocurrencies. We seek to develop a common framework for all countries to deal with this matter.”
India has been deliberating on cryptocurrency regulation for some time now. The Supreme Court of India lifted the ban on cryptocurrency trading in the country in March 2020, which had been imposed by the RBI. However, the Indian government has been working on a bill to ban cryptocurrencies and regulate an official digital currency. The bill is expected to be introduced in the current session of parliament.
The Indian government has been cautious about cryptocurrencies, citing concerns over their potential use in money laundering and terrorist financing. However, the government has also recognized the potential of blockchain technology, and has been exploring its use cases in various sectors. The government has also been working on a national blockchain strategy to promote the adoption of blockchain technology in the country.
India’s stance on cryptocurrency regulation is significant, given the country’s status as a major player in the global economy. The G20 countries represent around 80% of the world’s economic output, and any common framework developed by the group would have a significant impact on the global cryptocurrency market. It remains to be seen how the discussions on cryptocurrency regulation will progress under India’s presidency, and what the eventual outcome will be.