Indian Central Bank: The Presidency of India has made it a priority to develop global crypto regulation.

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According to the Reserve Bank of India (RBI), one of the G20’s priorities under India’s presidency will be to “develop a framework of global regulation, including the possibility of prohibiting unbacked crypto assets, stablecoins and defi.” This is because “turmoil” in the crypto assets market is “one of the major risks that could potentially undermine global financial stability.”
Indian Central Bank on Crypto Regulation
The Reserve Bank of India (RBI) released its Financial Stability Report (FSR), for December on Thursday. The report, which is 172 pages long, includes discussions about crypto assets, central bank digital currency (CBDCs) and decentralized finance.
The RBI report states that “Regulating new technology or business models after they have grown up to a systemic degree is difficult.” “Policymakers must design a policy approach to promote responsible innovation and reduce financial stability risks in the crypto ecosystem,” said the Indian central bank.
Under India’s G20 presidency one of the priorities is to create a framework for global regulation. This includes the possibility of prohibiting unbacked crypto assets, stablecoins and defi.
The central bank identified “turmoil in cryptocurrency assets market” as one of the “major risks that could potentially undermine global financial security.” It also stated that crypto assets are highly volatile and “exhibit high correlations with equities,” and have fallen since inflation rose.
The report also notes that the collapse and subsequent sell-offs of crypto exchange FTX “have highlighted the inherent vulnerabilities within the crypto ecosystem.” It also points out the terra/luna meltdown of May and the bankruptcy filings by several major crypto firms including crypto hedge fund Three Arrows Capital (3AC), and crypto lender Celsius Network.

G20 Members Meet to Discuss Crypto Regulation
Ajay Seth, India’s economic affairs secretary, stated earlier this month that the G20 members aspire to create a policy consensus regarding crypto assets in order to improve global regulation. Indian Finance Minister Nirmala Sitharaman stated in October that crypto would be on India’s agenda during its G20 presidency. She also said that she hopes that a technology-driven regulatory framework for crypto assets will be established.
The Group of 20 (G20), includes Argentina, Brazil, China, France and Germany. The group accounts for around 85% of the world’s GDP.
India’s central bank has recommended repeatedly banning all cryptocurrencies that are not issued by the state, including bitcoin and Ethereum. Shaktikanta Das, Governor of RBI, warned last week that cryptocurrencies could cause the next financial crisis. India’s finance minister stated in July that crypto regulation and banning can only be achieved with significant international cooperation.
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