India said on Thursday that under its ongoing G20 presidency, it will prioritize the development of a framework for global regulation of unbacked cryptocurrencies and explore the possibility of banning them.
India took over the presidency of the Group 20 in the middle of the month. The group is made up of 19 nations across the globe and the EU. International organizations such as the World Bank and the International Monetary Fund are invited.
The Reserve Bank of India, the Indian central bank, said in a report today thatcryptocurrencies are highly volatile and exhibit high correlations with equities in ways that dispute the industry's narrative and claims around the virtual digital assets being an alternative source of value.
According to the Indian central bank, policymakers across the globe are concerned that thecryptocurrencies sector may become more connected with mainstream finance and that it may affect the real economy.
The central bank of India is a critic of the industry. The next financial crisis will be caused by private Cryptocurrencies unless they are banned.
The market determines the change in value of a product. Unlike any other asset or product, our main concern is that it doesn't have any underlying He said in a conference that he thinks privatecryptocurrencies is a trendy way of describing speculative activity.
The idea of skipping or breaking the existing financial system is what led to the creation of the digital currency. They don't believe in a regulated financial world. I haven't heard a good argument about what public purpose it serves and I think it should be banned.
India is one of the countries that has a strict approach to cryptocurrencies. It began taxing virtual currency earlier this year, with a 30% tax on the gains and a 1% deduction on each transaction.
The nation's move, along with the market downturn, has severely deplete the transactions that local exchanges CoinSwitch Kuber and CoinDCX process in the country.
In a recent interview, Changpeng "CZ" Zhao, founder and chief executive of the world's largest digital asset exchange, said that the firm doesn't see India as a very friendly environment. He said that the firm is trying to relay its concerns to the local authority, but that tax policies can take a long while to change.
There are countries where regulations are pro-business. He said that they don't go to countries where they won't have sustainable businesses.
The service was rolled back amid a regulatory scare after it was launched. The firm disabled its support for local payments due to some pressure from the Reserve Bank of India.
India is the second largest internet market in the world. Over the past decade, the nation has attracted over $75 billion in investment from the likes of Amazon, Lightspeed, and Tiger Global.
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