In Brief
- India’s crypto regulation drive garnered support from the IMF and the U.S. recently.
- The IMF has told countries not to make crypto a legal tender.
- The US Treasury Secretary Janet Yellen also called for more regulation.
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India’s attempt to regulate cryptocurrencies has gained support from the International Monetary Fund (IMF) and the United States.
Reuters reported that India, the current president of the Group of 20 (G20) bloc, gained crucial support during the meeting between the finance chiefs of the countries in the blocs.
India has long been calling for global regulation of cryptocurrencies. It now plans to use its position as the head of the G20 to achieve that. The country’s ministry of finance has already held a seminar for all members of the G20 on how to develop a single regulatory framework.
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India’s Posture Towards Crypto
While global regulation might be a good idea, having India at the forefront could cause alarm for the nascent industry. The Indian government has long discussed a law that bans or at least regulates cryptocurrencies.
Although there is no final government position yet, the Reserve Bank of India believes crypto should be banned because they are similar to Ponzi schemes.
Meanwhile, India already has several policies in place that appear anti-crypto. These include the 1% tax on every sell crypto transaction and the 30% capital gains tax. All these policies already have telling effects on the Indian crypto industry.
IMF Urges More Regulation
But it appears that others might also share a similar view. The IMF, a long-term critic of cryptocurrencies, also shares this view. Its managing director, Kristalina Georgieva, said after a meeting with India’s finance minister that banning crypto should be an option.
The financial organization recently released its nine-point action plan on how countries should treat crypto. One of the points suggested that countries shouldn’t make digital assets their legal tenders.
According to the action plan, this is necessary given the collapse of several crypto exchanges and billions lost in an asset over the years.
US Also Eyes More Regulation
Meanwhile, the US Secretary of Treasury Janet Yellen said while the country has not suggested an outright ban yet, it is essential to have a regulatory framework for crypto. The US is working with other governments for this.
While a ban on crypto assets is not the government position in the US, several regulators and legislators are in support of such bans.
