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Central government will seek support from other countries on crypto regulations

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RBI

HIGHLIGHTS :

  • Cases of scams involving cryptocurrencies are on the rise
  • G20’s FSB prepares to formulate rules for the crypto segment
  • FSB does not have the power to make laws

The country has recently implemented tax laws on virtual digital assets and this has reduced trading volumes on crypto exchanges.

Cases of scams involving cryptocurrencies are on the rise

In the absence of clear regulations regarding cryptocurrencies, scams are on the rise in this segment. Finance Minister Nirmala Sitharaman has told Parliament that if other countries do not support banning the crypto segment and do not take such a decision, it will be difficult to implement it in the country.

Sitharaman said that the Reserve Bank of India (RBI) had proposed to ban the crypto segment. RBI is concerned that the inclusion of cryptocurrencies in the financial system could have an impact on monetary and fiscal stability. The tax laws regarding virtual digital assets have come into force in the country recently and this has reduced trading volumes on crypto exchanges. Sitharaman said in a written statement in the Lok Sabha, “RBI is of the view that cryptocurrencies should be banned. RBI has stated that it is not a single currency as every currency needs to be issued by a central bank or government. it occurs.”

G20’s FSB prepares to formulate rules for the crypto segment

Recently the Internet and Mobile Association of India (IAMAI) decided to wind up the Blockchain and Crypto Assets Council (BACC). Cases of scams involving cryptocurrencies are on the rise. To deal with this situation, the Financial Stability Board (FSB), the G20 body, is preparing to propose stricter global rules for the crypto segment in the next few months.

Finance Minister Nirmala Sitharaman said that the Reserve Bank of India (RBI) has recommended to the government that it should frame regulations for cryptocurrencies.  The Indian government wants an international collaboration if such a ban has to be put into effect, said Sitharaman.

FSB does not have the power to make laws

The FSB includes officials from regulators and central banks of the G20 countries. The FSB was restricted to monitoring the crypto segment but over the past few months, due to the high volatility in cryptocurrencies and the rise in scams, stricter regulations are needed. In a statement issued by the FSB, it was said that it will report to the G20 finance ministers and central bank governors on regulatory control and monitoring of stablecoins and other crypto assets. Regarding stablecoins, the FSB believes that using them as a means of payment requires stricter regulation. The FSB does not have the power to make laws, but its members are committed to implementing its regulatory principles within their jurisdictions.

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