The International Monetary Fund and the United States have shown support for India’s plan to coordinate global crypto regulation during the recent G20 meeting.
India, which currently holds the presidency of the G20, has been pushing for a collective global effort to regulate the nascent digital asset industry and mitigate its potential risks.
During the latest G20 meeting, which ended on Saturday, the country’s finance minister held a seminar for member states to share their concerns about the risks of cryptocurrencies while discussing how to come up with a common framework .
US Treasury Secretary Janet Yellen speaking to Reuters on the sidelines of the G20 meeting in Bengaluru Said Establishing a strong regulatory framework was “important”, but added that the United States had not suggested any outright bans.
“We have not suggested an outright ban on crypto activities, but creating a strong regulatory framework is important. We are working with other governments.”
However, the IMF was not as accommodating. The organization’s managing director Kristalina Georgieva told reporters after co-chairing a meeting with Indian Finance Minister Nirmala Sitharaman that banning crypto should be an option.
The Reserve Bank of India (RBI) has long maintained a tough stance towards digital assets, arguing that the nascent asset class has no inherent value. The central bank has consistently warned investors and the government against cryptocurrencies, citing volatility and the risk of fraud and scams.
Earlier this year, Shaktikanta Das, governor of India’s central bank, said Cryptocurrencies have no intrinsic value and his alleged “worth nothing but to believe.” Cryptos aren’t even worth a tulip, he said, alluding to the famous Dutch tulip mania explosion in the early part of the last century.
despite calls from the central bank ban cryptocurrencies, the Indian government has been debating on drafting a law to regulate cryptocurrencies. In July last year, the Indian government said that any effective regulation or ban on cryptocurrencies would require global cooperation.
India’s crypto industry takes a hard hit under tax laws
India’s controversial crypto tax plans, which include a 30% tax on income from cryptocurrencies as well as a 1% tax deducted at source (TDS) at the time of payment of crypto transfers, have adversely affected trading volumes on local cryptocurrency exchanges. Is.
According to a research study by Delhi-based technology policy think tank Esya Center, Indian crypto traders have Have been taken More than $3.8 billion in trading volume moved from local exchanges to international crypto platforms after the country’s controversial tax policy came into effect.
“Of this, a cumulative amount of $3,055 million was offshored within six months of the current financial year,” the report said, adding that “an estimated 1.7 million users switched” from domestic crypto exchanges to foreign counterparts over the past year.
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