India to decide on crypto ban after discussion with global leaders
New Delhi: Treading cautiously on the issue of banning cryptocurrency, the government would now take more time to take a final call on formulating regulations for cryptocurrency.
According to a senior official, the decision in this regard would be taken after extensive discussions with global leaders on putting a ban on such digital currencies.
India changed its stance on cryptocurrency ban after the International Monetary Fund (IMF) and the Financial Stability Board (FSB) stated in its report that there should not be any blanket ban on cryptocurrencies and advocated for a coordinated global action to deal with risks posed by such assets. The report of the IMF and the FSB was jointly released a day before the start of G20 leaders’ summit on Thursday last.
In its report, the IMF-FSB has recommended laying out a “roadmap” and suggested “bare minimum” regulations that every country should have on cryptocurrencies.
“As the IMF has suggested a ‘base level’ of regulations, the countries having more risk could frame more stringent regulations for crypto regulations and those with lesser risk cannot go beyond the ‘bare minimum’ norms for digital currency,” the official said.
“Since G20 leaders have endorsed it, it’s now on the part of ministers and governments to hold discussions to take it forward. We expect a lot of discussion for finalising the ways to implement it faster, swifter and in a comprehensive manner,” the official said, adding, “We have a good framework to decide our own way forward. The final call on it would be taken in the coming months.”
Earlier, India was very much ‘aggressive’ for formulation of a global regulation on cryptocurrencies to tackle tax evasion and round tripping of funds. Comparing it to gambling, the Reserve Bank of India (RBI) was asked to put a blanket ban on assets like Bitcoin, Ether, Tether, Binance Coin, etc.
Expressing challenges in banning the virtual currency, the official said that it would be difficult for one country to ban cryptocurrencies and globally a consensus has to be reached that all countries follow the “bare minimum” regulation that the IMF-FSB paper has outlined.
“If you want to ban it (cryptocurrency), go ahead and ban it. But if the rest of the countries are not banning it, it will be extremely difficult for one country to ban it. Now, we have to take up and try to build a consensus on regulation,” the official said, adding that though the discussion will happen in our system, it wouldn’t be an easy one.
It’s hopeful that the decision in this regard would be taken during the fourth meeting of G20 finance ministers and central bank governors, which is scheduled to take place in Marrakech, Morocco, on the sidelines of the 2023 annual meetings of World Bank and IMF from October 9-15.
“The purpose of regulation is that the risk is well managed. Any country that feels they have more risk can make their regulation more restrictive,” the official said, adding that if all countries agree on the same regulation then there will be no arbitrage.
