Updated on January 16, 2023 01:30 PM
India is the second-largest internet market worldwide, with more than 600 million online users. Let's find out more about the most recent G20 cryptocurrency movement in India.
Recently, India took up the Group 20 presidency for a year. The club, which consists of 19 countries from different continents and the EU, accounts for 85% of the global GDP. Also, non-member nations like Singapore and Spain as well as international bodies like the World Bank and the IMF are invited.
The Indian central bank, the Reserve Bank of India, stated in research recently, that cryptocurrency assets are very volatile and show significant correlations with equities, contradicting the industry's narrative and claims that virtual digital assets are a different source of value owing to their alleged benefits in inflation hedging.
The Indian government's attitude toward cryptocurrencies has shifted. The Reserve Bank of India warned users, holders, and dealers of virtual currencies, including cryptocurrencies, of the potential risks involved with their usage in a statement released in 2013.
The RBI issued a circular in 2017 that forbade banks and other regulated organisations from offering services to people or companies engaged in cryptocurrency trading. The circular essentially rendered the purchase or sale of cryptocurrency by Indian citizens unlawful.
The RBI's prohibition on cryptocurrencies was, however, overturned by the Supreme Court of India in March 2020 on the grounds that it was "disproportionate" and infringed upon people's basic rights. This ruling opened the way for greater use of cryptocurrencies and effectively legalised their usage in India.
Last week, RBI Governor Shaktikanta Das issued a warning, stating that unless private cryptocurrencies are outlawed, the next financial crisis will be caused by their implementation. According to Das, the concept that cryptocurrency bypasses or undermines the current financial system is where it all began. Let's go further into India's cryptocurrency perspective.
Also read: Indian CBDC Launch Update
India is one of the countries that has adopted a strict cryptocurrency policy. It started taxing virtual currencies earlier this year, charging a gain-based 30% tax and a transaction-based 1% deduction. The relocation of the country and the subsequent market collapse have significantly reduced the volume of transactions processed in the country by local exchanges CoinSwitch Kuber and CoinDCX, which are supported by Sequoia India and Andreessen Horowitz and Pantera, respectively.
In a recent interview, Changpeng Zhao, "CZ", founder and CEO of Binance, the largest cryptocurrency exchange in the world, stated that the company does not consider India to be a "very crypto-friendly environment."
He said that while the company is making an effort to express its concerns to the local government on local taxation, tax rules normally take a very long time to alter.
He continued by bashfully mentioning that Binance operates in nations with pro-crypto and pro-business policies. Further, he added, they don't fly to nations where they won't be able to operate any kind of powerful enterprise, whether they go or not.
As part of its G20 presidency's finance track, India will hold 40 meetings around the nation. These gatherings will include four ministerial-level meetings and a number of working groups with the goal of significantly advancing talks on the state of the world economy.
Regulating cryptocurrency assets, controlling debt vulnerabilities, and reorienting international financial institutions are the focal areas of the finance track. During India's G20 presidency, Finance Minister Sitharaman and Reserve Bank of India Governor Shaktikanta Das will oversee the overall financial track.
The first gathering of finance ministers and central bank governors is slated to take place in Bengaluru in early 2023.
Since consumer protection must be at the centre of all discussions on cryptocurrency regulation, there are several methods regulators may guarantee consumer protection in the business. Due to the decentralised nature of cryptocurrencies and the absence of a central authority or middleman, it is crucial to safeguard consumers from hazards like fraud and financial loss.
One strategy calls for robust Know Your Customer (KYC) and Anti-Money Laundering (AML) procedures to be implemented by bitcoin exchanges and other platforms to stop illegal activities. To make sure that exchanges have enough resources to defend against losses, regulators might also demand that they keep a minimum amount of capital.
Providing customers with clear and straightforward information about the dangers and possible rewards of investing in cryptocurrencies is another crucial component of consumer protection in cryptocurrency legislation. Additionally, it is crucial to tell customers about their rights, the options accessible to them for dispute resolution, and what to do if they run into issues or have concerns.
Overall, consumer safety is a crucial factor to take into account when regulating cryptocurrencies, and it necessitates a mix of strict laws and sound business procedures to guard against hazards like financial losses.
India has a unique chance to establish the standard for cryptocurrency regulation globally and educate other countries about the basic concepts that must underpin their framework for cryptocurrency regulation.
Is cryptocurrency legal in India?
Since the government and the central bank still appear to be unclear about how to deal with this new-age occurrence, there is no simple "yes" or "no" response to this topic. In 2018, The RBI aggressively opposed these tokens in India and effectively outlawed them. The RBI prohibition was later overturned by the Indian Supreme Court in 2020. The nation's investors and cryptocurrency exchanges praised that decision. Following this, Indian banks have attempted to limit transactions with cryptocurrency exchanges since, in their opinion, the RBI regulates these entities. The Supreme Court's decision to overturn the RBI's 2018 prohibition, however, means that banks may no longer communicate it to consumers, allowing for the continuation of cryptocurrency trading in India.
Does crypto have a future in India?
It will significantly strengthen India's digital economy. The use of digital money will also result in a more effective and affordable method for managing currencies. To fully capitalise on Blockchain technology, CBDC should coexist peacefully with other cryptocurrencies.
Is cryptocurrency available in India?
With as little as INR 100, customers may trade in more than 80 cryptocurrencies. This platform offers a wide range of trading pairings, including INR-to-crypto exchange, cryptocurrency-to-cryptocurrency trading, and crypto-to-INR trading.