In the middle of the crypto crash, the government is planning to introduce regulations that will be one of the utmost priorities for India at the upcoming G20 summit. As cryptocurrencies are still not legally authorized in India, they will fall under Virtual Digital Assets (VDAs).
Chief Economic Advisor V. Anantha Nageswaran said at an Indian Council for Research on International Economic Relations (ICRIER) event that the third objective of India’s G20 presidency will be to identify
“consensus-based solutions for accelerating the scale and scope of the response of the global community to many transboundary challenges such as regulation of virtual assets.”
The government will either regulate it or ban it altogether as advised by the RBI. The final verdict is yet to be announced as the regulatory authorities are still contemplating the best resolution as US treasury secretary Janet Yellen suggested combined efforts for regulation.
“We need a high regulatory standard globally, we need to take steps to reduce the cost of cross-border payments and we are very actively working in the context of financial stability with Financial Action Task Force and multilateral banks like IMF to really address on global basis the risks .and some of the benefits from cryptocurrencies,” she mentioned.
Officials mentioned that every country has its own opinions on cryptocurrencies depending on their interests. While they also acknowledge that banning it completely is not the solution. The Reserve Bank of India asserts that cryptocurrency should be banned because there is no currency to support it. RBI has said that allowing cryptocurrency will make it more difficult to regulate the currency and financial markets as well. It has also indicated concerns regarding tax regulation and money laundering. On regulation, PM Narendra Modi as well as finance minister Nirmala Sitharaman has claimed that it may be difficult for a single country to move individually and a global effort is required.