Finance ministers from G20 countries have formally embraced the synthesis paper jointly issued by the Financial Stability Board (FSB) and the International Monetary Fund (IMF), which presents various recommendations regarding the regulation of cryptocurrencies.
This development is being regarded by some stakeholders as a significant milestone and a crucial step toward establishing a comprehensive regulatory framework for cryptocurrencies. However, opinions on the matter remain divided, with some considering it a work in progress.
Ashish Singhal, Co-Founder and CEO of CoinSwitch, stated, “The adoption of the G20 roadmap on crypto-assets… is a detailed and action-oriented roadmap that will help coordinate global policy as well as develop mitigating strategies and regulations on crypto assets.”
Kiran Mysore Vivekananda, Chief Public Policy Officer at CoinDCX, highlighted the groundbreaking nature of this initiative, particularly in the context of emerging technologies. He said, “It is one of the first such initiatives around the world, especially related to emerging technologies, wherein such a consensus has been achieved. It is definitely a game changer and establishes a precedent for discussions around other emerging technologies worldwide.”
To provide a clearer perspective on the journey of cryptocurrencies toward becoming a legally recognized asset class with well-defined regulations, here is a timeline of key developments in the evolution of cryptocurrency regulations:
- February 1, 2018: Then Finance Minister Arun Jaitley, during the Budget Speech, declared that the government did not recognize cryptocurrencies as legal tender and aimed to curb their use in financing illicit activities. However, he expressed support for blockchain technology.
- April 5, 2018: The Reserve Bank of India (RBI) issued a notification restricting banks from facilitating fund transfers for the purchase of digital currencies, a move that was later challenged in the Supreme Court.
- March 2020: Two years later, a three-judge bench of the Supreme Court overturned RBI’s notification that had banned banks from dealing in cryptocurrencies.
- February 2021: A high-level committee led by the Secretary (Economic Affairs) recommended the prohibition of all private cryptocurrencies, except those issued by the government.
- November 2021: In a parliamentary response about Bitcoin, Finance Minister Nirmala Sitharaman stated that the government had no plans to recognize Bitcoin as a currency and revealed that it did not collect data on Bitcoin transactions.
- February 1, 2022: During the Budget speech, Finance Minister Nirmala Sitharaman introduced a 30 percent tax on gains from cryptocurrency sales. This was seen as an implicit acceptance of cryptocurrencies, despite the absence of a regulatory framework.
- July 2022: Finance Minister Nirmala Sitharaman mentioned that a ban on cryptocurrencies would require international collaboration to assess risks, benefits, and the development of common taxonomy and standards.
- January 2023: RBI Governor Shaktikanta Das advocated for a complete ban on bitcoins in India, categorizing them as a form of gambling.
- September 1, 2023: G20 member nations endorsed the Financial Stability Board’s (FSB) recommendations on the regulation of crypto assets to mitigate associated risks.
- October 12, 2023: Finance ministers from G20 nations convened in Marrakesh, Morocco, and formally adopted the synthesis paper released by the IMF and the Financial Stability Board the previous month.
