The Reserve Bank of India will lead crypto regulation talks during the upcoming G20 summit. The central bank has called crypto a threat and asked for global coordination on the matter.
India’s central bank, the Reserve Bank of India (RBI), will lead discussions on global crypto regulation during the upcoming G20 Summit. India has the presidency for this event, and its position on crypto has generally been quite unfavorable, leading to some displeasure in the crypto community.
Crypto: A ‘Threat to Financial Stability’
In a recent report, the RBI stated that the crypto asset class could bring turmoil to global markets in various ways. It explained the matter as such,
“The recurring turmoil in crypto markets, de-pegging of some stablecoins and the resultant fall in the market value of the broader crypto markets has reinforced apprehensions that cryptocurrencies are a material threat to financial stability… The Presidency intends to shape a coordinated and comprehensive policy approach in G20 jointly, by creating a framework for global regulation of crypto-assets, stablecoins, and decentralised finance (DeFi).”
The country’s officials, including the finance minister, have spoken of a common framework that countries could work on. It even laid out a crypto proposal, with this global policy approach as a key aspect of the proposal.
Click here to read more about the benefits and drawbacks or crypto regulation.
Cryptocurrencies are highly popular in India, with one report showing that Indian crypto users outnumbered U.S. users five to one and represented 53% of the global total. At the same time, the country’s central bank is looking to expand the central bank digital currency (CBDC), which is the digital rupee.
Reserve Bank of India Expands Digital Rupee CBDC Pilot
The report also spoke of the digital rupee and the associated pilot program. The pilot for the CBDC was first launched in November 2022 for wholesale entities, with retail users seeing the pilot starting in December 2022.
The RBI has stated that the pilots showed positive results. As such, it will expand the pilot to include more banks, with the latter focusing on distribution and payment.
India Wants Global Coordination on Crypto Regulation
India has not made substantial crypto regulation following its decision to heavily tax the crypto asset class. For years, the country had wavered on cryptocurrencies’ status before deciding on the heavy tax scheme.
Rather, India is waiting on a coordinated global effort to regulate the asset, which it believes is necessary as the asset class doesn’t recognize borders in the way that fiat does.
However, web3 appears to be growing in India. This could work in the favor of the asset class, as the government may realize the economic benefits of this industry.
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