(Kitco News) - India, which took over the G-20 presidency in December, has for the first time acknowledged that it is working with the International Monetary Fund (IMF) and the Financial Stability Board (FSB) to develop a regulatory approach for cryptocurrencies.
The G-20, or Group of 20, is an intergovernmental forum of the world’s 20 largest economies, including the European Union.
The revelation was made by Ajay Seth, Secretary of India’s Department of Economic Affairs, who was quoted by Forkast as saying, “We have reached out to IMF, and IMF is working on the paper with us, to bring in the aspects of the monetary policy, the macroeconomic aspects, and the policy approach to crypto assets.” Seth made the comments during an interview with the Press Trust of India.
The IMF previously held a meeting with representatives of developing economies around the paper in January. According to Seth, the IMF is finalizing the paper and plans to present it at a G20 meeting later this month.
Shortly after ascending to the G-20 presidency, India's Finance Minister Nirmala Sitharaman said that regulating crypto assets would be a priority. This goal was reiterated by Sitharaman during an interview on Friday when she said that they are also looking to establish a set of global standard operating procedures that can be agreed upon by member nations for the regulation of crypto assets.
The finance minister noted that the regulation of cryptocurrencies cannot be done by any one country, and instead “has to be a collective action because technology doesn't brook any borders.”
India has taken a hardline stance against the crypto industry, implementing a 30% tax on all crypto profits and a 1% tax deducted at source (TDS) on all crypto transactions – all while not yet declaring cryptocurrencies as legal.
When asked how the government could tax something that wasn’t technically considered legal, Sitharaman said, “I don’t wait till regulation comes into place for taxing people who are earning profits. The question of legality will come only if something is declared illegal.”
Secretary Seth provided further clarity on the matter, saying, “The question of legality will come only if something is declared illegal. Crypto assets are not illegal in this country."
|
| India and Singapore move forward with blockchain-based payment trials |
India previously drafted a bill for crypto regulation in the nation, but that legislation was put on ice after regulators determined that achieving a global consensus was the optimal route.
"We had prepared a bill (which) went through internal discussions. Thereafter there was a consensus that we have to deal with it at the global level," Seth said.
After the IMF’s paper outlining a global crypto policy is presented at the upcoming G-20 meeting and the members reach a consensus, the next step will be to take it to the crypto assets working group of the Financial Stability Board.
“The Financial Stability Board has proposed forming a crypto asset working group and we are equally part of that,” said Seth, adding that G20 member nations are trying to find consensus on crypto regulations, which will have to “evolve across all countries” since crypto is an asset class that can be traded across the board and thus requires all countries to accept the policy.
