Will India Push for a Ban of Crypto Under its G20 Presidency?

The Reserve Bank of India (RBI) has voiced renewed worry about the developing crypto ecosystem and urged that sections of it be prohibited. In its most recent financial stability report, issued on December 29, the central bank stated that it will utilize its rotating leadership of the G20 group of the world’s top economies to advocate for the creation of a global regulatory framework for crypto assets.

The study presents a typical list of catastrophes in the crypto space that occurred in 2022. It cited crypto’s volatility, significant correlation with stocks, and inadequacies as an inflation hedge, as well as governance difficulties. The report calls for an orchestrated approach:

“To address potential future financial stability risks and to protect consumers and investors, it is important to arrive at a common approach to crypto assets.”

Furthermore, India is intend to take its presidency of G20 serious and push for the global guidelines:

“Under India’s G20 presidency, one of the priorities is to develop a framework for global regulation, including the possibility of prohibition, of unbacked crypto assets, stablecoins and DeFi.”

With a population of almost 1.4 billion, roughly ten percent is estimated to be using cryptocurrencies in India, mostly youngsters in the country. This despite the government generally being opposed to the widespread adoption of the asset class in the country. Under the umbrella of a global agenda, it now looks to further tighten crypto in the country and focus on CBDC. In December of 2021, the Reserve Bank of India already advised for an outright ban on cryptocurrencies in the country, as a partial ban would not be feasible.