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India to explore prohibition of unbacked crypto in its G20 presidency • TechCrunch


India said on Thursday that with the G20 presidency underway, it will prioritize the development of a framework for global regulation of unbacked crypto assets, stablecoins and decentralized finance. and will explore the “possibility of [their] ban” in a potentially major setback for the nascent industry.

India began its one-year presidency of the Group of 20 earlier this month. The group includes 19 countries across all continents and the EU, accounting for 85% of the world’s GDP. It also invites non-member countries including Singapore and Spain and international organizations such as the World Bank and the IMF.

Reserve Bank of India, central bank of India, speak in a report today that crypto assets are highly volatile and exhibit a high correlation with stocks in a way that controversially reflects the industry narrative and claims surrounding virtual digital assets are an alternative source of value due to their supposed inflation-hedging benefit.

The central bank of India warned that policymakers globally are concerned that the crypto sector could become more connected to mainstream finance and “divert finance away from traditional finance.” system with a broader impact on the real economy”.

India’s central bank is one of the most vocal critics of the cryptocurrency industry. RBI Governor Shaktikanta Das warned last week that private cryptocurrencies will cause the next financial crisis unless its use is banned.

“Changing value in any so-called product is a function of the market. But unlike any other asset or product, our main concern with cryptocurrency is that it doesn’t have any basis. I think crypto or private crypto is a trendy way to describe what 100% speculative activity is,” he said during a conference.

Das said cryptocurrency has its roots in the idea that it bypasses or disrupts the existing financial system. “They don’t believe in central banks, they don’t believe in a regulated financial world. I have yet to hear a valid argument about the public purpose it serves,” he said, adding that he holds the view that cryptocurrencies should be banned.

India is one of the countries that has taken a strict approach to cryptocurrencies. Earlier this year, it started taxing cryptocurrencies, 30% tax on profits and deduct 1% for every crypto transaction.

The country’s move, coupled with the market downturn, has severely depleted the trades that local exchanges CoinSwitch Kuber, backed by Sequoia India and Andreessen Horowitz, and CoinDCX, are supported. by Pantera, processed in water.

Changpeng “CZ” Zhao, founder and CEO of the world’s largest cryptocurrency exchange Binance, told TechCrunch in a recent interview that the company I can’t see India as a “very crypto-friendly environment”. He said the company was trying to convey its concerns to local governments about local taxation, but insisted that tax policies often take a long time to change.

“Binance is aimed at countries with pro-crypto and corporate regulation. We don’t go to countries where we won’t have a sustainable business — or any business, whether we go or not,” he said.

Coinbase, which has supported both CoinDCX and CoinSwitch Kuber, launched its cryptocurrency platform in the country earlier this year but quickly service restore amid regulatory fear. Coinbase co-founder and CEO Brian Armstrong said in May that the company had disabled Coinbase support for local payments in the UPI infrastructure.”because of some informal pressure from [central bank] Reserve Bank of India.”

With over 600 million connected users, India is the second largest internet market globally. The country, home to one of the largest startup ecosystems in the world, has attracted more than $75 billion in investments from the likes of Google, Meta, Amazon, Sequoia, Lightspeed and Tiger Global over the past decade. .

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