In what will come as welcome news, a joint declaration was officially signed by all G20 nations, to regulate cryptocurrencies according to guidelines laid down by Financial Action Task Force (FATF). The event was held in Buenos Aires, Argentina.
The declaration, among other areas, also touched upon cryptocurrencies. Section 25 of the declaration of which India is also a signatory states, “We will continue to monitor and, if necessary, tackle emerging risks and vulnerabilities in the financial system; and, through continued regulatory and supervisory cooperation, address fragmentation. We look forward to continued progress on achieving resilient non-bank financial intermediation. We will step up efforts to ensure that the potential benefits of technology in the financial sector can be realized while risks are mitigated. We will regulate crypto-assets for anti-money laundering and countering the financing of terrorism in line with FATF standards and we will consider other responses as needed. We thank Mr. Mark Carney for his service as FSB Chair and we welcome the appointment of Mr. Randal K Quarles, as Chair of the FSB and of Mr. Klaas Knot, as Vice Chair.”
This is an interesting point of view, given that India has largely been non-committal to the concept of cryptocurrencies, barring a few occasions, where it has not displayed a very bullish stance.
However, one advantage is, there has been numerous whispers pertaining to regulations and cryptocurrencies in the country. In August this year, the Reserve Bank of India (RBI) published a report on cryptocurrencies. A passage from the report read, “Though cryptocurrency may not currently pose systemic risks, its increasing popularity leading to price bubbles raises serious concerns for consumer and investor protection, and market integrity. Notably, Bitcoins lost nearly US$200 billion in market capitalisation in about two months from the peak value in December 2017. As per the CoinMarketCap, the overall cryptocurrency market had nearly touched US$800 billion in January 2018.”
However, at the moment, as the hearing pertaining to cryptocurrencies and exchanges hangs in balance, it is hard to see which way the dice will fall. But if India is genuinely thinking of working towards regulating cryptocurrencies, there could be no better news.
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