Crypto to climate: Delhi takes step back to move forward, get consensus

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.

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