RBI Governor G20 members may consider an entire crypto ban
India is making headlines regarding crypto regulations again. Reserve Bank of India (RBI) Governor Shaktikanta Das has mentioned that some members of the G20 summit may consider a complete ban on cryptocurrencies.
The International Monetary Fund (IMF) and the Financial Stability Board (FSB) will work on a technical document and formulate guidelines that will put in place a regulatory framework for crypto-assets. These regulations are to be proposed by the Indian Presidency at the G20 summit.
The paper will be considered at the upcoming meeting between G20 finance ministers and central bank governors. The G20 summit is scheduled to take place in October. The discussion regarding the regulations for private digital assets is expected to be concluded before the month of September.
In the recent press conference that took place at the end of the first G20 summit, India’s finance minister, Nirmala Sitharaman, clearly stated that anything that falls outside the central bank’s control should not be considered a currency.
India has been ambivalent about private digital asset regulations for a long time now, but the G20 summit is expected to take into consideration the formulation of crypto regulations. India is also working on launching its own Digital Bank Digital Currency (CBDC) as the country considers this a step towards competing with crypto.
When it comes to questions and requests about crypto regulations, Nirmala Sitharaman states that understanding the risks associated with crypto is the first step towards regulating the industry. After thoroughly analyzing the risks, the G20 nations will present a comprehensive approach to dealing with private digital currencies at the G20 summit. G20 nations will formulate policies after taking macroeconomic conditions and other regulatory viewpoints into account.
Other options are being considered during the drafting of crypto regulations
The Reserve Bank of India has been pushing for a complete ban on the use of private digital assets for some time now. However, Sitharaman has constructed a case where there could be a synchronized regulatory mechanism where these assets would be governed by a single regulatory policy.
This means that other countries do not need to adopt other regulations as this regulation will act as an umbrella for many countries. This idea was supported by US Treasury Secretary Janet Yellen, who supported strict regulation of private digital assets. This step will also help to reduce the costs of cross-border payments.
The RBI governor states that there may also be other options to regulate the asset, but it is too early to talk about them at the moment. Das mentioned that while the RBI is keen on an outright ban, there are conflicting views that crypto should be regulated to keep a check on the risk associated with the asset.
According to Shaktikanta Das, cryptocurrency is still a work in progress. Doubts about the regulations were formed and fueled by the idea that private digital assets continue to pose serious threats to the financial stability of the economy, along with other security concerns.
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