India Soon to Decide Its Stand on Crypto As G20 Endorses FSB Recommendations
On the sidelines of the G20 summit last weekend, a senior official of India's Finance Ministry said on Sunday that India will soon decide its position on crypto in the coming months after the G20 member nations agreed on an acceptable crypto rule framework.
Speaking to the media on Sunday, Ajay Seth, Secretary of the Department of Economic Affairs, said "India's position will be decided in the coming months." He added that since "the framework for assessing risk has been put together by the G20" we will analyze "what globally the leaders have agreed to" and then decide on "what will be a sound policy for India.”
Seth's remarks on Sunday suggest a shift in India's approach, hinting at the possibility of the country crafting its own cryptocurrency legislation. This marks a significant development, as India had previously halted efforts to create comprehensive cryptocurrency regulations with a bill in early 2022.
India has introduced anti-money laundering rules and established a tax framework for cryptocurrencies, aligning with the FSB's recommendations. This proactive stance may meet the FSB's requirements for reviewing implementation status by the end of 2025.
On the other hand, India’s central bank has recommended a blanket ban on cryptocurrencies. However, the government hasn’t indicated any such position and it is unlikely to go down that path. “If any country wants to ban it you can ban it, but if the rest of the countries are not banning it will be extremely difficult to implement the ban,” said the official.
The G20's agreement on crypto regulation is significant, but it may require coordinated action from all countries to be fully effective. In India, policy deliberations will occur on two fronts. On the multilateral level, India will advocate for a consensus on G20 regulations and extend efforts to include countries beyond the G20. This broader approach is seen as necessary for the effectiveness of crypto regulation.
At the domestic level, the government will introduce regulations that align with the consensus reached on the multilateral platforms. Regarding potential crypto regulations, the official stated that the framework is prepared, and the emphasis will now shift towards implementing these regulations. The roadmap is in place, and the focus is on the practical implementation of these measures.
On Saturday, the G20 leaders officially supported the high-level recommendations put forth by the Financial Stability Board (FSB) concerning the regulation, supervision, and oversight of crypto assets. The G20 New Delhi Leaders' Declaration emphasized the need for the FSB and standard-setting bodies (SSBs) to actively encourage the worldwide implementation of these recommendations in a consistent manner to prevent regulatory disparities.