India on Sunday (September 10) said New Delhi will frame its own cryptocurrency regulations through a process of extensive discussions at both the global level and with domestic stakeholders.
Speaking to CNBC-TV18’s Sapna Das, Ajay Seth, economic affairs secretary, said, “Based on the consensus which we have been able to achieve or rather build, we will be considering those recommendations very carefully and decide our own policies and thereafter take further action.”
Talking about RBI’s proposed ban on cryptocurrency, he said, “You are asking a leading question…it is not to be seen in that binary…it’s a framework for assessing the risk that has been put together, what will be the sound policies, so keeping that framework in mind now we will analyse our own position with reference to what globally the leaders have agreed that they will travel it together. So given those what should be our position will be decided in the coming months.”
Seth highlighted the substantial progress made within the G20 membership, particularly by organisations such as the International Monetary Fund (IMF), Financial Stability Board (FSB), Financial Action Task Force (FATF), and the Bank for International Settlements (BIS). These organisations have collectively established a clear and comprehensive understanding of a policy framework for assessing risk related to cryptocurrencies.
Seth emphasised that there has been an endorsement of earlier work done by ministers regarding regulations for stablecoins and unbacked crypto assets. This endorsement includes the formulation of high-level principles and regulations for this asset class.
Seth also said the G20 recognises the higher risks associated with cryptocurrencies, particularly for emerging economies. The G20 discussions explored the building blocks for effective regulations, identified responsible entities, outlined a tentative timeframe, and specified the necessary regulatory components.
Seth emphasised that a clear understanding was reached on all three matters, and further work will be carried out by relevant agencies in collaboration with respective jurisdictions. Each country will also decide its course of action based on these understandings.
Regarding global growth and inflation concerns, Seth mentioned that inflation remained high in several economies, leading central banks to contemplate tighter monetary policies and increased policy rates. These measures could potentially affect economic growth in those countries.
He also discussed the impact of lower global trade on India, particularly in terms of goods exports. However, Seth noted that Indian services exports had been performing exceptionally well, which could help mitigate the impact of subdued global trade.
Meanwhile, official sources said, “Now the G20 leaders have endorsed it and now ministers and governments will discuss it and take it forward. We expect a lot of discussion to happen on how to implement it faster, swifter, and in a comprehensive manner. We have a good framework to decide our own way forward. The foundation is ready beyond how much we want to go it is for us to decide in the coming months and then take a call.”
“If you want to ban it (crypto), go ahead and ban it. But if the rest of the countries are not banning it, it will be extremely difficult for one country to ban it. Now that discussion, we have to take up and try to build a consensus on regulation. Then we gradually decide on our own system. The discussion will happen now in our system. It is not an easy one,” official sources added.