As the G20 summit approaches, all eyes are on India and its potential to lead the conversation on crypto regulation. With a population of over 1.4 billion people, India is the world’s largest democracy and has been actively working on introducing dedicated legislation to regulate the crypto sector.
The Cryptocurrency and Regulation of Official Digital Currency Bill is currently being introduced by the government, and India’s lower house has brought digital assets, including cryptocurrencies and NFTs, within its tax regime in its 2022 budget. However, India recognizes that effective tax and regulation will require international agreement, and the country is using its G20 presidency to push for alignment on crypto regulation.
India’s finance minister has recently revealed that the government is pushing to create a global policy approach toward crypto, which could encourage G20 member countries to commit to greater regulatory alignment. By harmonizing their approaches, G20 nations would enable closer collaboration on tackling money laundering and provide clear guidelines for international businesses, which could be a boon for innovation and adoption.
Moreover, crypto products can empower the financially excluded in India, where bank account ownership rates remain low and many people are underserved by the traditional financial sector. With the growth of digital infrastructure in the country, crypto finance offers an effective way to serve these populations.
Crypto, alternative payment, and savings products can fulfill many of the functions of bank accounts and payment cards, but they can be easier to obtain. Receiving and sending cryptocurrency only requires a functioning crypto address. Already, India has some of the highest crypto adoption rates among the G20 nations. One survey found that 8% of respondents in the country reported owning Bitcoin (BTC), and Chainalysis’ 2022 Global Crypto Adoption Index ranked India fourth in the world.
The G20 summit offers an opportunity for India to lead the way in crypto regulation, but it also highlights the need for international collaboration to create effective legislation. Crypto assets are innately borderless, and any legislation can only be effective with international collaboration. A common taxonomy and set of standards are needed to align crypto regulations with existing international trade agreements.
The United States Congress has taken an increasingly proactive stance in shaping the country’s crypto regulation, and countries from Nigeria to Hong Kong and from South Africa to the Bahamas have used the past year to ramp up oversight of crypto firms. The EU has passed its landmark MiCA regulation, and the UK has turned its attention to the space.
The growing consensus among politicians is that crypto regulations should not be written in national silos. Instead, they should be harmonized to align with existing international trade agreements, which could enable closer collaboration on tackling money laundering and provide clear guidelines for international businesses.
In conclusion, India has the potential to lead the conversation on crypto regulation at the upcoming G20 summit, but international collaboration is needed to create effective legislation. Crypto products offer an effective way to serve the financially excluded in India, and the growth of digital infrastructure in the country provides a promising opportunity for innovation and adoption. The G20 summit offers an opportunity for member countries to commit to greater regulatory alignment and provide clear guidelines for international businesses, which could be a boon for the global crypto industry.
