India to Establish Cryptocurrency SOPs During G20 Presidency

New Developments in India’s Crypto Regulatory Landscape

India is gearing up to establish standard operating procedures (SOPs) for cryptocurrencies as part of its G20 presidency from December 1, 2022, to November 30, 2023. Finance Minister Nirmala Sitharaman made this announcement while emphasizing the necessity for global cooperation to address the challenges posed by cryptocurrency.

Global Collaboration on Crypto Regulation

Sitharaman has consistently advocated for international collaboration in shaping the future of cryptocurrencies, citing concerns regarding financial stability. During a conversation with local Indian reporters on October 15, she confirmed that cryptocurrencies will be included in India’s agenda during its G20 presidency. She noted, “No country can alone effectively handle or regulate crypto,” thus underlining the need for a collective approach.

Understanding Crypto’s Role and Usage

In her remarks, Sitharaman raised critical questions regarding the platforms for trading crypto assets, highlighting the urgent need to understand the purposes behind their usage. She expressed the importance of having a common understanding among G20 nations about the buying, selling, and profit-making activities associated with cryptocurrencies.

Concerns About Money Laundering

The finance minister also pointed to the potential misuse of crypto assets in money laundering activities, a concern echoed by India’s law enforcement agency, the Enforcement Directorate. Sitharaman mentioned that G20 nations recognize these risks and have reiterated the necessity for all countries to contribute to effective regulation of crypto assets.

India’s Central Bank Digital Currency (CBDC) Initiative

Adding to the regulatory discourse, on October 7, the Reserve Bank of India unveiled a list of proposed features and the underlying rationale for its forthcoming central bank digital currency (CBDC). This 51-page document outlines key motivations for the issuance of the digital rupee, including enhancing trust, safety, liquidity, settlement finality, and integrity.

Motivations Behind India’s Digital Currency

Among the major motivations for introducing a digital currency are reduced operational costs and improved financial inclusion. The move towards a CBDC signals India’s intent to modernize its financial system while addressing contemporary economic challenges.

Looking Ahead

As India prepares to take the helm of the G20, its focus on developing crypto SOPs and the digital rupee reflects a proactive approach to navigating the complexities of cryptocurrencies and blockchain technology. The outcome of these efforts could significantly shape the regulatory landscape in both India and the global arena.