India G20 Cryptocurrency framework

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India Takes Center Stage

As the world’s attention turns to India, the host of this year’s G20 summit scheduled for September 9th and 10th in New Delhi, the global crypto community is eagerly awaiting discussions that could profoundly impact the future of digital currencies worldwide. India’s insistence on establishing global regulations to prevent regulatory arbitrage in the crypto space during the Finance Track of G20 meetings throughout the year has set the stage for critical deliberations. With delegates from the world’s most influential economies converging in the capital, stakeholders keenly observe how these discussions will translate into regulatory action.

Expectations of an International Framework

In India’s cryptocurrency sector, participants have high expectations that the G20 summit will leverage insights from prominent organizations like the International Monetary Fund (IMF) and the Financial Stability Board (FSB) to construct a thorough regulatory framework. This approach aims to ensure a cohesive global approach to crypto regulation.

Edul Patel, co-founder of Mudrex, shared insights into India’s stance, stating, “India recognizes the global nature of cryptocurrencies and advocates for cooperative measures to regulate them effectively. A comprehensive regulatory roadmap is being devised based on discussions and insights from organizations like the IMF and the FSB.” It’s worth noting that India, as the G20 President, is leading efforts to harmonize crypto regulations globally, preventing players from taking advantage of varying regulations worldwide.

The Role of Policy Papers

Guided by India’s stewardship, a policy document commissioned by the G20 has been released, integrating contributions from critical entities such as , the International Monetary Fund (IMF) with the Financial Stability Board (FSB) and other globally recognized authorities within the cryptocurrency sector. This paper provides a crucial foundation for the regulatory discussions at the summit.

Ensuring Retail Investor Protection

Stakeholders like Shivam Thakral, CEO of crypto exchange Buycoin, are particularly concerned about protecting retail investors from crypto market volatility. The industry anticipates that the summit will yield frameworks that clarify the roles of crypto exchanges and brokerages in safeguarding retail investors.

Thakral emphasized the importance of India’s leadership in creating a global framework, saying, “India’s presidency at the G20 can bring together a collective worldwide effort to regulate and harness deep tech to its full potential.” Such regulations will instil confidence in Indian users who have embraced technologies like AI and Web3 while providing clarity for the crypto industry.

Curbing Illicit Activities

Apart from protecting individual investors, a cooperative regulatory approach is also a critical requirement to address issues such as money laundering, terror financing, and market manipulation. The summit will ensure that cryptocurrencies are never misuse for illicit activities, a point highlighted by Home Minister Amit Shah during a related G20 conference.

Manhar Garegrat, Country Head for India and Global Partnership at Liminal, emphasized the importance of international cooperation in addressing these challenges, citing the positive impact of initiatives like the Travel Rule framework by the FATF.

Empowering Taxation and Financial Inclusion

The summit may also explore a two-pillar taxation framework, strengthening the role of tax authorities. Such measures can promote international collaboration and enhance investor confidence, fostering financial inclusion and innovation.

Balancing Regulation and Innovation

However, amidst the push for global regulations, concerns arise that overly stringent frameworks may stifle innovation. Kavita Gupta of Delta Blockchain Fund stressed the importance of nurturing innovation alongside regulation. Gupta emphasize that showcasing real-world use cases of blockchain technology would be essential, highlighting initiatives in India where blockchain is used for practical applications such as issuing caste certificates and managing land records.

The G20 summit in India is poise to influence the global landscape of crypto regulations, and stakeholders worldwide are closely monitoring the outcomes, hoping for a balance between regulation and fostering innovation in the rapidly evolving crypto space.

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