India is poised to take a firm stance on cryptocurrency regulation in the coming months, signaling that it may move away from its previous stance. The announcement was made by Ajay Seth, Secretary, Ministry of Economic Affairs, during the recent Group of Twenty (G20) leaders’ summit. This development came as India took a more active role in shaping global crypto rules after achieving its goal of a “synthesis document” from the International Monetary Fund (IMF) and Financial Stability Board (FSB). Here are the details…
Cryptocurrencies were discussed at the G20 summit
Seth emphasized that India’s position on cryptocurrencies will be determined by analyzing the global consensus reached among G20 leaders on an acceptable regulatory framework. “India’s position will be decided in the coming months,” said Seth, emphasizing the importance of a comprehensive assessment of the risk assessment framework put together by the G20.
India’s approach to cryptocurrency has been under scrutiny for years as the country’s once thriving crypto industry faces challenges including tight taxes, a crypto winter, a “shadow ban”, anti-money laundering rules and regulatory actions against major crypto exchanges. The decision to prioritize the creation of global crypto rules during the G20 presidency marks a significant shift in India’s strategy.
India charts its own course
Seth’s announcement, in particular, indicates that India could chart its own course in legalizing cryptocurrency, departing from its previous stance where comprehensive crypto legislation plans were suspended in early 2022. Indian officials have previously stated that the country may not necessarily need legislation in the form of a bill, given its existing anti-money laundering rules and tax structure for cryptocurrencies.
While the country’s central bank advocated a crypto ban, the government did not take a firm position and a general ban was deemed impractical by the synthesis document. Before handing over the G20 Presidency to Brazil, India published the crypto-related presidential memo and outlined its initial recommendations on cryptocurrency regulation. As India hands over its leadership role in the G20 to Brazil, member states commit to responsible use of artificial intelligence (AI) technology. The G20 leader’s declaration highlights the potential of AI to bridge global digital divides and its role in shaping policy and regulations for cryptocurrencies and central bank digital currencies (CBDCs) in cross-border payments.
Artificial intelligence was also talked about
The G20, which includes leading countries such as Argentina, Australia, Canada, China, France, Germany, India and others, recognizes artificial intelligence as a tool for global economic prosperity and expansion. The commitment is to leverage artificial intelligence for the public good, focusing on responsible and inclusive development while protecting people’s rights and security. To ensure responsible AI use, G20 member countries aim to address concerns around data protection, biases, human surveillance and ethics. They commit to international cooperation and discussions on global AI governance, emphasizing the importance of building trustworthy AI.
In addition, the G20 reaffirms its commitment to the G20 AI Principles, which were prepared in 2019 and outline global policies and cooperation for “trusted AI”. The group advocates a pro-innovation regulatory approach to maximize AI benefits while reducing associated risks. Indian Finance Minister Nirmala Sitharaman emphasized the need for global cooperation in regulating cryptocurrencies during the G20 summit. In an interconnected world, cross-border partnerships are crucial in addressing the challenges posed by financial technology. As India continues its evolving stance on cryptocurrencies, the G20 continues to play a key role in shaping the future of AI and digital currencies on the global stage.
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