The G20 Summit is held annually between the leaders of twenty of the world’s most powerful economies. It’s a chance to discuss policy issues and find solutions to problems currently affecting the world. Each year, a new country takes over the G20 presidency, and this year India is in charge. Being the G20 president, India is responsible for setting the agenda for discussions, and many experts believe that this will be a chance to shape global policy on cryptocurrency.
Over the past few years, India has become one of the biggest countries in terms of crypto adoptions, but regulations have been brought in to control how people use it. Bitcoin price history has often been affected by governments, and some investors believe that the upcoming G20 summit may have an impact on the market.
India’s Crypto Regulations
While there are an estimated 100 million crypto users in India, around 7% of the country’s total population, the country has taken a relatively hard stance on cryptocurrency. In 2021, India enacted the Cryptocurrency and Official Regulation of Digital Currency Act, which effectively banned the use of crypto to make purchases.
The bill caused the price of crypto to fall dramatically, affecting the global market, not just Indian crypto users. Bitcoin prices fell around 13%, while many other coins saw much steeper declines in just a few hours. However, while Indians can’t use crypto to make payments, the bill didn’t ban users from holding it as an asset.
In addition to this bill, India recently raised taxes on cryptocurrency in 2022. The government imposed a 30% tax on all money made through crypto, including trading, investing, and staking. The move was widely criticized by crypto users and companies invested in the market, and some fear that the G20 presidency could mean further issues for crypto.
What Will the G20 Summit Involve?
September 2023 will see the next G20 Summit take place, and there’s a good chance it may have a significant impact on the future of cryptocurrency. The Summit has previously discussed crypto and regulations, including in 2020 and 2021, and while no global consensus has yet been reached, the Financial Action Task Force did set cryptocurrency standards for countries to enact.
India will have the responsibility to set the agenda for the Summit as the G20 president, and Finance Minister Nirmala Sitharaman has said that discussion on regulating crypto assets will be one of the presidency’s priorities.
Currently, the cryptocurrency market represents something of a risk to traditional financial institutions while also being difficult to regulate and control. It’s likely that world leaders will want to increase regulation, although it’s unclear what shape these will take.
Some fear that the G20 Summit may lead to global bans and increasing tax rates on crypto, making it more difficult to invest and trade these digital assets. However, most experts believe that any agreed-upon regulations are unlikely to be this harsh.
How Regulation May Help Crypto
Cryptocurrencies have so far been highly unregulated when compared to traditional assets such as stocks, and this has been both an advantage and a disadvantage. It’s given investors more freedom, but it’s also created more volatility in the market and led to bad actors being able to profit from scams.
Some feel that regulations will help create a safer and less volatile market, encouraging further investment from retail and institutional investors alike. Not only that, but it may help to prevent future scams and create a healthier market overall. Whatever happens, it’s hard to predict how the market may initially react.