The journey of cryptocurrencies to become a legally accepted asset class with a set of well-defined regulations has been an unfinished one. However, with the Finance Ministers of G20 nations recently adopting a synthesis paper released by the Financial Stability Board (FSB) and the International Monetary Fund (IMF), containing a number of suggestions on regulations of cryptocurrencies, the path to a full-fledged regulatory framework is becoming more visible.
CoinSwitch Co-Founder and CEO, Ashish Singhal said, “The adoption of the G20 roadmap on crypto-assets is a detailed and action-oriented roadmap that will help coordinate global policy as well as develop mitigating strategies and regulations on crypto assets.”
CoinDCX Chief Public Policy Officer, Kiran Mysore Vivekananda added, “It is one of the first such initiatives around the world, especially related to emerging technologies, wherein such a consensus has been achieved. It is definitely a game changer, and establishes a precedent for discussions around other emerging technologies world-wide.”
Here is a timeline of steps that cryptocurrencies have gone through in its journey to become a legally accepted asset class with a set of well-defined regulations:
– February 1, 2018: In his Budget Speech, then Finance Minister Arun Jaitley stated that the government did not consider cryptocurrencies as legal tender or coin and would eliminate the use of crypto assets in financing illegitimate activities. However, he spoke in favour of blockchain technology.
– April 5, 2018: The Reserve Bank of India (RBI) issued a notification restricting banks to enable funds transfer for buying digital currencies. This was challenged in the Supreme Court.
– March 2020: Two years later, a three-judge bench of the Supreme Court quashed RBI’s notification that had banned the banks from dealing in cryptocurrencies.
– February 2021: A high-level committee constituted under the Chairmanship of Secretary (Economic Affairs) suggested that all the private cryptocurrencies, except any virtual currencies issued by the government, be prohibited in India.
– November 2021: In a reply to a question on bitcoin in the Parliament, Finance Minister Nirmala Sitharaman said that the government had no proposal to recognise Bitcoin as a currency and also admitted that it did not collect data on Bitcoin transactions.
– February 1, 2022: During the Budget speech, Finance Minister Nirmala Sitharaman introduced a 30% tax on gains made from the sale of cryptocurrencies, which was seen as an implicit acceptance of cryptocurrencies.
– July 2022: Nirmala Sitharaman in a Parliamentary question said that the ban on cryptocurrencies could be effective only with international collaboration on the risks, benefits, evolution of common taxonomy and standards.
– January 2023: RBI Governor Shaktikanta Das said that bitcoins should be completely banned in India and it can just be called ‘gambling’.
– September 1, 2023: The G20 member nations endorsed the Financial Stability Board’s (FSB) recommendations on regulation of crypto assets to mitigate risks associated.
– October 12, 2023: Finance ministers of G20 nations at Marrakesh, Morocco adopted the synthesis paper released by IMF-Financial Stability Board (FSB).
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