The G20 countries plan to create a policy consensus on cryptocurrencies in a bid to better regulate the asset class.
On Wednesday, India’s federal economic affairs secretary Ajay Seth said the G20 countries will study the implications of cryptocurrencies for the economy, monetary policy, and the banking sector in order to inform a policy consensus, according to a report by Reuters.
“The regulation should flow from the policy view taken. In fact, one of the priorities which have been put on the table is to help countries build a consensus for policy approach to the crypto assets,” he said.
The G20 or Group of Twenty, is an intergovernmental forum comprising 19 countries and the European Union. It works to address major issues related to the global economy, such as international financial stability, climate change mitigation, and sustainable development.
As of now, India holds the G20 presidency and has been hosting the group’s first meeting of finance and central bank deputies on December 13-15 in Bengaluru.
The crypto industry is largely unregulated, and a policy consensus could help different jurisdictions establish a regulatory framework in accordance with their peers.
Notably, the emphasis on crypto regulation comes after the unprecedented collapse of FTX, once the third-largest cryptocurrency exchange that has failed, delivering billions of dollars in losses to retail clients.
As reported, the government of The Bahamas arrested Sam Bankman-Fried, the disgraced founder of the exchange, on Monday following the “receipt of formal notification from the United States that it has filed criminal charges against SBF and is likely to request his extradition.
The Southern District of New York has indicted SBF on eight criminal charges including wire fraud and conspiracy by misusing customer funds. Separately, the Securities and Exchange Commission charged SBF with “orchestrating a scheme to defraud equity investors in FTX.”
India Asks for Global Collaboration to Regulate Crypto
Nirmala Sitharaman, India’s Finance Minister, has claimed that a global collaboration would be required for any effective regulation or ban. Back in July, she said the Reserve Bank of India (RBI) believes cryptocurrencies are not currencies because every modern currency needs to be issued by the government or central bank.
“Cryptocurrencies are by definition borderless and require international collaboration to prevent regulatory arbitrage. Therefore, any legislation for regulation or for banning can be effective only after significant international collaboration on evaluation of the risks and benefits and evolution of common taxonomy and standards,” she said at the time.
Earlier this year, India’s government unveiled its crypto tax plans, which included a proposal to tax gains from crypto transfers at a 30% rate. Moreover, any buyer of virtual digital assets will have to pay a 1% tax deduction at source (TDS).