By Ankur Grover
The last decade has witnessed a seismic shift in the cryptocurrency landscape. In a remarkably short period of time, digital assets have spread to the mainstream, attracting the attention of investors, technologists and financial institutions. What started as a niche movement has now become a global phenomenon, fueled by the appeal of decentralization, financial inclusion and the potential of blockchain technology.
Yet despite the appeal and promise of cryptocurrencies, there is no shortage of challenges. While this budding industry
At the end of the G20 summit, one of the topics that dominated discussions was cryptocurrencies. We look at the captivating role of India
India in the spotlight
India assumed the presidency of the G20 in 2023, providing it with a unique opportunity to influence global financial policies, including those related to cryptocurrencies. The G20, made up of the world’s largest economies and the European Union, serves as a platform for international cooperation and economic governance. Led by India, the G20 addressed several critical issues related to cryptocurrencies.
The New Delhi G20 Leaders’ Declaration, released at the conclusion of India’s G20 presidency, is an important document that highlights the G20’s position on cryptocurrencies. He recognizes the growing importance of cryptocurrencies around the world. economy
Understanding the IMF FSB Summary Paper on Crypto
During India’s G20 presidency, the International Monetary Fund (IMF) and the Financial Stability Board (FSB) jointly released a position paper on cryptocurrencies. This paper provided additional information on the global perspective of crypto regulation. He highlighted the potential risks to global financial stability posed by cryptocurrencies and discussed various regulatory approaches taken by different countries. The paper also addresses cross-border challenges and the potential of cryptocurrencies to promote financial inclusion.
It’s no secret that countries around the world have taken different stances when it comes to cryptocurrencies. Some have opted for strict regulations, while others have banned them altogether. India’s approach to cryptocurrencies has been a roller coaster ride.
In 2018, the Reserve Bank of India
In the recent Union Budget for 2022-23, the Indian government proposed a tax of 30% on income from the transfer of digital assets, along with a TDS (tax deduction at source) of 1% on these transactions. Finance Minister Nirmala Sitharaman has highlighted the need for global collaboration to regulate and even ban cryptocurrencies due to their borderless nature.
Even the International Monetary Fund (IMF) and Financial Stability Board (FSB) seem to agree. In a recent article, they highlighted the need for a comprehensive policy and regulatory response to address the risks posed by cryptoassets in the area of financial stability.
Interestingly, the G20 Leaders’ Declaration also supported the FSB’s recommendations and welcomed the document’s roadmap for establishing a coordinated and holistic policy and regulatory framework. It is clear that the international community wants to find the right balance.
However, let’s not jump to conclusions just yet. The decision to ban cryptocurrencies is not as simple as it seems, as the IMF and FSB paper points out. Enforcing a ban in one jurisdiction could simply result in crypto activities migrating to more crypto-friendly jurisdictions, putting the former at a disadvantage. This could even increase risks associated with financial integrity.
So what is the alternative? Well, the paper suggests that regulation and supervision of licensed or registered crypto-asset issuers and service providers could help fill information gaps, making cross-border oversight much easier.
The document calls for the implementation of anti-money laundering and anti-terrorism financing standards established by the Financial Action Task Force, specifically tailored to cryptocurrencies and service providers. This would certainly be a step in the right direction to create a safer environment for all parties involved.
Challenges on the horizon
However, challenges lie ahead as the cryptocurrency landscape continues to evolve. Ensuring regulatory consistency across different jurisdictions remains a complex undertaking, with differences in approaches leading to regulatory uncertainty. Technological advancements such as decentralized finance (DeFi) and non-fungible tokens (NFTs) present new regulatory challenges that require immediate attention.
Enforcing regulations in a decentralized global ecosystem poses significant challenges, and effective cross-border enforcement requires coordinated international efforts. Combating illicit activities in the thriving crypto space requires constant vigilance and cooperation between nations.
The author is co-founder and CEO of Zoksh Pay