India’s Push for Global Cryptocurrency Regulations Gains Momentum at G20 Summit
India has taken a significant stride towards global cryptocurrency regulations as the country’s Prime Minister, Narendra Modi, called for the establishment of universal guidelines and regulations for cryptocurrency transactions. Speaking at the recently concluded B20 Summit in New Delhi, Modi emphasized the need for ethical usage of cryptocurrencies and artificial intelligence (AI), particularly in the face of AI-enabled financial frauds.
The call for a global cryptocurrency regulatory framework comes at a time when numerous countries are seeking ways to control the growing presence of cryptocurrencies and non-fungible tokens (NFTs). The European Union (EU) has already backed stricter tax regulations for cryptocurrencies and advocated for a global approach to adopt its crypto asset rules. India, as the current leader of the G20 Presidency, is using this platform to push for a global regulatory framework for cryptocurrencies.
India’s efforts in this regard began in August when the country put forward a presidency note in favor of such a regulatory framework. The proposed measures align with the outlook of the International Monetary Fund (IMF) and follow the guidelines of the Financial Action Task Force (FATF) and the Financial Stability Board (FSB).
One of the unique aspects of India’s proposal is its focus on the specific needs of developing economies. These nations often lack the infrastructure to effectively deal with cryptocurrencies in the absence of a proper regulatory framework. In line with this, the presidency note announced the launch of a synthesis paper by the IMF and FSB by the end of August 2023, which will outline the global macro implications of cryptocurrencies.
Prime Minister Modi stressed the importance of global consensus in creating a regulatory framework for cryptocurrencies and AI. He urged the world to come together to address the concerns of the global south, particularly developing nations. Using air traffic control measures as an example, Modi highlighted the need for common rules and regulations to govern emerging technologies like cryptocurrencies and AI.
The Indian Prime Minister’s call for a global cryptocurrency regulatory framework comes in the wake of significant losses due to crypto scams in the country. In January this year, the Enforcement Directorate of India detected a loss of over £8 billion from such scams. The discussions on cryptocurrency regulation at the upcoming G20 Summit are expected to initiate conversations about the impact of cryptocurrencies on macroeconomic issues, with a particular focus on emerging and developing economies.
The push for a global cryptocurrency regulatory framework is long overdue, considering the increasing incidents of crypto scams worldwide. In the United States alone, more than 46,000 people fell victim to cryptocurrency scams in 2021, leading to a collective loss of over £789 million. The average loss per person was £2,000, with Bitcoin scams accounting for 70% of the total followed by Tether and Ether scams.
According to the 2022 Crypto Crime Report by Chainalysis, the world lost over £11 billion in crypto scams in 2021, marking a 79% increase compared to the previous year. The report highlighted the exploitation of various features associated with cryptocurrencies, leading to the surge in fraud cases.
In conclusion, India’s push for a global cryptocurrency regulatory framework at the G20 Summit is gaining significant momentum. Prime Minister Modi’s call for universal guidelines and regulations aims to ensure the ethical usage of cryptocurrencies and AI while addressing the safety concerns associated with these technologies. As countries across the world grapple with the challenges posed by cryptocurrencies, the establishment of a global regulatory framework could be a revolutionary step in protecting individuals and economies from crypto scams and fostering the responsible use of technology.