Bengaluru: The US and the IMF supported India's calls to regulate cryptocurrencies at the G20 meeting in Bengaluru. India has been urging a collective global effort to deal with problems caused by cryptocurrencies.
The Indian government has been debating and advocating drafting a law to regulate or even ban cryptocurrencies. The RBI has opined that they should be banned because they are similar to a Ponzi scheme. The finance ministry said the issue of a common framework will be discussed with G20 member states.
U.S. Treasury Secretary Janet Yellen told Reuters that it was critical that a strong regulatory framework is established for these currencies but the US has not suggested any outright banning. "We're working with other governments."
IMF Managing Director Kristalina Georgieva also told the media that banning crypto should be an option. The international body has laid out a nine-point action plan about how countries can treat crypto assets and on top of it was not giving cryptocurrencies legal tender status.
If regulations or bans are put in place, it will be trouble for crypto investors. On the other hand, regulations can bring more investors into digital assets because many are hesitant due to the lack of regulation.
The RBI governor after the two-day meeting of finance ministers and central bank governors said that there were opinions that the option of a ban or prohibition should be considered.
Shivam Thakral, CEO of BuyUcoin, told Mint that the G20 summit 2023 offers a great opportunity for creating a global consensus around crypto regulations. "The crypto regulations in India have been in a grey area since the historic judgement by the Supreme Court of India in March 2020 and there is an urgent need to have a clear set of policies for digital assets in India."
He added that some critical points that need immediate attention are defining crypto as a security/commodity/asset class, regulating fiat pegged stablecoins, protecting retail investors, licensing regime for crypto exchanges, and regulatory monitoring for companies involved in the business of digital assets.