Even as Bitcoin touches $80,000 apiece and renews huge interest for investment, India is yet to see noticeable progress in developing a regulatory mechanism for crypto. A report by Chainalysis says India leads the world on global adoption index for crypto this year.
In October last year, Finance Ministers and Central Bank Governors (FMCBGs) of G20 nations, under India’s Presidency, adopted the roadmap for crypto regulation as proposed by the International Monetary Fund (IMF) and the Financial Stability Board (FSB). The roadmap is not in favour of a blanket ban on crypto-assets, but it vouches for comprehensive regulatory and supervisory oversight as a better option.
Now, the next presidency of the G20 is near conclusion, with Brazil set to host the leadership summit later this month, which will also be attended by Prime Minister Narendra Modi. The summit is expected to take stock of resolutions adopted during the last presidency. The G20 New Delhi Leaders’ Declaration endorsed the FSB’s high-level recommendations for the regulation, supervision, and oversight of crypto-assets activities and markets, as well as global stablecoin arrangements. “We ask the FSB and SSBs to promote the effective and timely implementation of these recommendations in a consistent manner globally to avoid regulatory arbitrage,” it had said.
The issue of crypto regulation is also critical at this moment because of US President-elect Donald Trump’s support for digital assets and the potential influence of pro-crypto lawmakers in Congress. Throughout his campaign, Trump pledged to position the US as a leader in the digital asset space. His proposed policies include accumulating Bitcoin reserves and appointing regulators to oversee the industry.
So far in 2024, Bitcoin has risen by around 90 per cent, fuelled by strong demand for US exchange-traded funds (ETFs) and the Fed’s interest rate cuts, outpacing traditional investments like stocks and gold.
Trump’s pro-crypto stance contrasts sharply with that of President Joe Biden, whose administration has taken a more cautious approach towards digital assets. Biden’s Securities and Exchange Commission (SEC), led by Gary Gensler, has been vocal about potential fraud and misconduct within the crypto industry.
India has taken a tough stance against cryptocurrencies since 2018, when the central bank prohibited lenders and other financial intermediaries from dealing with crypto users or exchanges, though the move was later struck down by the Supreme Court.
In 2021, the government prepared a bill that would have banned private cryptocurrencies, though it has not been introduced. Last year, when it was president of the G20, India called for a global framework to regulate such assets. The RBI remains against crypto in any form.
