Under its G20 presidency, India is actively working to build consensus on various contentious issues, even if it entails reevaluating some of its previously held positions. These endeavors span a wide range of topics, from advocating for the establishment of a global framework for regulating crypto-assets to demonstrating flexibility in matters related to climate transition.
On Thursday, in response to a request from the Indian G20 Presidency, the International Monetary Fund (IMF) and the Financial Stability Board (FSB) jointly published a policy paper. This paper advises against an outright ban on crypto-assets and instead suggests the implementation of a licensing system for crypto-asset platforms. This proposed approach would subject crypto-assets to compliance with anti-money laundering and counter-terrorist financing standards.
India’s expected endorsement of these recommendations signals a notable shift in the positions of its key regulatory authorities. In 2018, the Central Board of Direct Taxes had submitted a draft proposal to the finance ministry, proposing a ban on virtual currencies. Subsequently, the Reserve Bank of India (RBI) had issued a directive prohibiting banks from engaging with cryptocurrencies. However, this directive was later overturned by the Supreme Court in 2020.