Fair And Open To All: How India’s G20 Presidency Can Help It Spearhead Global Crypto Risk Framework

As a growing community, nations can look forward to a globally regulated and uniform crypto space, which is fair and open to all.

In the first meeting of the G20 presidency as well, India looked up to the IMF for proposing a global crypto regulatory framework. ( Image Source :Getty )

India has been gradually inching towards a proper crypto regulatory framework. The introduction of taxes in the Union Budget 2022 along with TDS deductions and laws like anti-money laundering is a testament to the fact that crypto adoption throughout the country is widely visible among traders and crypto enthusiasts. 

Contributing to the same equation, Finance Minister Nirmala Sitharaman recently mentioned that India’s G20 presidency is aiming to develop a joint ‘global’ framework that can help all countries deal with the different kinds of risks associated with crypto and the Web3 space.

The activity log of cryptocurrency and its impact over the last few years was enough to make the countries realise its potential and how much it can complement the financial landscape of different countries. 

Even though rapid development has been at the forefront of crypto over the last few years, there have been enough scenarios and downfalls of the wide industry for people to also be doubtful on multiple occasions — the Luna collapse, the Celsius collapse, and the FTX collapse, to mention a few.

In the first meeting of the G20 presidency as well, India looked up to the IMF for proposing a global crypto regulatory framework.

Sitharaman also suggested that the regulation of cryptocurrencies is a very important part to ensure consumer protection. However, bad actors and unfortunate events could negatively impact this space and the economy with it, which is why there needs to be a common framework for all countries to follow.

So does this mean that regulation is coming?

Most likely.

Cryptocurrency, the one-trillion-market-cap-space, though has a lot of potential but it also comes with an equal amount of vulnerability similar to most of the running industries.

If we take the case of FTX’s bankruptcy, we know how it caused a huge liquidity crisis in most markets because of high unrest and massive sell-off among the audience. Most importantly, the unregulated and unmonitored nature of these markets also leads to money laundering and Terror financing.

The backing and the rising of the Indian government clearly signify that the cryptos and the Web3 space are very well meant to stick around like butter and bread. The government aims to find more potential in this rising industry. The recent introduction of the digital rupee by the RBI in India in 2022 is an example of the same.

With legality comes regulations. With regulations comes a global adoption. And with global adoption comes better use cases.
Most importantly, India in the G20 summit can also:

• Propose an illustrative tax regime for crypto investors and traders across the world which can be modified and adopted by respective countries.
• Reduce chances of financial collisions of the most reliable and widely known exchanges by proposing the Introduction of global monitoring and reporting framework.
• Propose Global regulation for the Industry and set up processes for Cross-border data sharing between member countries for crypto transactions.
• Blockchain is a revolutionary technology that could heavily influence how most economic, financial and data transfer methods around us work. 

The general narrative around the industry says, rather than eliminating the technology completely which provided returns to knowledgeable traders, it could also be pivoted more towards progress and better use cases. 

The bad actors and unfortunate events aren’t going to abruptly stop. However, as a growing community, we can look forward to a globally regulated and uniform crypto space, which is fair and open to all.

India, in the G20 summit,  can’t propose and implement all these changes by itself. It needs the support of every country that wants to harness the power of blockchain and crypto in favour of their respective countries and citizens.

Over the past few years, the crypto industry has witnessed significant developments. India has also been at the forefront of it. Just like every other industry, the regulators will take their time to analyse crypto and in this case, it is bound to walk the same path before it’s adopted globally, legally.

This rather complements what crypto taxation platforms have been aiming for - making it possible to own crypto assets and completely abide by the law at the same time.

(The author is the founder and CEO of KoinX, a platform that helps calculate and provide crypto tax reports)

Disclaimer: The opinions, beliefs, and views expressed by the various authors and forum participants on this website are personal. Crypto products and NFTs are unregulated and can be highly risky. There may be no regulatory recourse for any loss from such transactions. Cryptocurrency is not a legal tender and is subject to market risks. Readers are advised to seek expert advice and read offer document(s) along with related important literature on the subject carefully before making any kind of investment whatsoever.