India Advocates for Global Cryptocurrency Framework at G20 Summit

At the latest Group of 20 (G20) summit, Prime Minister Narendra Modi of India highlighted the need for international collaboration in crafting cryptocurrency guidelines. With India holding the G20 presidency, it is actively pushing for a cohesive global strategy on cryptocurrency governance.

The G20, comprising 19 countries and the European Union, serves as a pillar for the world’s dominant and emerging economies. It plays a crucial role in reinforcing international structures and decision-making on key global economic concerns.

In an interaction with a domestic publication, Modi delved into the future of nascent technologies like blockchain and cryptocurrency. He emphasized their potential to influence globally, stressing the need for regulations that transcend national boundaries. Drawing an analogy with the aviation sector, Modi noted that in the same way there are standardized rules for air traffic and security, cryptocurrencies should be governed by global standards.

Modi elaborated on India’s contributions to the global crypto dialogue, stating, “India’s G20 presidency expanded the crypto conversation beyond financial stability to consider its broader macroeconomic implications, especially for emerging markets and developing economies. Our presidency also hosted enriching seminars and discussions, deepening insights into crypto assets.” On August 1, India released a presidency note detailing its perspectives on a global framework for cryptocurrency. This note aligned with guidelines from the Financial Stability Board, the Financial Action Task Force, and the International Monetary Fund, while also incorporating additional suggestions tailored to developing economies.

Despite India’s push for a global crypto framework, the nation’s own regulatory environment for cryptocurrencies remains ambiguous, marked by high taxation and a lack of clarity. In 2022, India introduced a 30% tax on cryptocurrency gains, which resulted in a significant departure of emerging crypto companies and a marked decrease in cryptocurrency trading activity.

The G20’s role in international economic cooperation is crucial in addressing and harmonizing regulations for emerging technologies. With India at the helm of the G20 presidency, the country is poised to influence the global conversation on cryptocurrency regulations, emphasizing the importance of a unified approach.

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Indian Supreme Court Expresses Discontent Over Lack of Crypto Regulations

The absence of defined rules and regulations governing cryptocurrencies in India has lately drawn the attention of the country’s Supreme Court. The court referred to the lack of such legislation as “unfortunate,” underscoring the pressing need for a legislative framework to regulate the rapidly expanding crypto industry.

The court has come under fire as the number of cryptocurrency-related criminal prosecutions increases. In response, the Union administration has been ordered by the Supreme Court to specify whether it plans to create a federal office particularly dedicated with looking into these instances. The national level needs a dedicated organization that can comprehend and fully probe the complicated nature of crypto transactions, the court noted.

In addition to investor safety, the Supreme Court is also concerned about the growing number of innocent investors who are being taken advantage of because of the complicated nature of cryptocurrency transactions. The court emphasized that an increase in fraudulent activities is being caused by the lack of a competent national institution to look into such matters.

Strangely, the government moved quickly to enact crypto taxes regulations, which took effect in April 2022, despite its slowness to develop clear crypto principles. The lack of legislative certainty has caused many established enterprises to migrate from India, which has had a substantial influence on the Indian cryptocurrency sector.

Despite the government having been told to start working on a crypto law as early as 2018, the court’s views came as a surprise. The regulatory ambiguity surrounding cryptocurrencies in India is further exacerbated by the fact that the final text of the crypto law has not yet been presented.

The Supreme Court’s comments highlight the urgent need for India to develop a thorough legal framework for cryptocurrencies. The court’s demand for clear legislation and a specialized investigative agency might be a big step toward securing investor security and stopping criminal activity as the nation deals with the potential and problems provided by the crypto industry.

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SVC Bank Caught in SVB Collapse Confusion

The recent collapse of Silicon Valley Bank (SVB), a major banking institution based in California, has sent shockwaves throughout the global financial sector. While countless businesses have been directly affected by the bank’s downfall, a bank in India with no connection to SVB has also felt the consequences of the crisis due to a simple mix-up in acronyms.

Shamrao Vithal Co-operative Bank (SVC Bank), a 116-year-old cooperative bank based in Mumbai, India, found itself caught in the line of fire when the news of SVB’s imminent shutdown began to spread on March 10. The similarity between the short forms of the two banks, SVB and SVC Bank, led to confusion among some Indian citizens, who mistakenly associated the Indian bank with the crisis in the United States.

Silicon Valley Bank has been a significant player in the banking industry, particularly in the technology and startup sectors. Founded in 1983, SVB has been a crucial financial partner to various emerging tech companies and venture capital firms. The bank’s collapse has raised concerns over the stability of the financial sector and the impact it may have on businesses tied to the bank.

In contrast, Shamrao Vithal Co-operative Bank has a long-standing history in India, having been established in 1907. As a cooperative bank, it focuses on serving the needs of its members and promoting financial inclusion in the country. SVC Bank offers a wide range of financial products and services, including savings accounts, loans, and insurance. The bank has successfully navigated numerous financial challenges throughout its history and remains an important institution in the Indian banking sector.

Despite the clear differences between the two banks and their respective markets, the confusion caused by the similarity in their acronyms led to panic among some SVC Bank customers. As a result, the Indian bank was forced to clarify its position and reassure its customers that it was not connected to the crisis unfolding in the United States.

This incident highlights the potential for misunderstandings in an increasingly interconnected world, where news spreads rapidly across borders, and even a minor mix-up can have significant consequences. It serves as a reminder for both financial institutions and the public to be vigilant in verifying information and understanding the differences between seemingly similar entities.


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India Implements AML Standards on Crypto

In a move that is not entirely surprising, the Indian government has implemented anti-money laundering (AML) standards on crypto. The Ministry of Finance published a notification in The Gazette of India on March 7, subjecting a range of crypto transactions to the Prevention of Money-Laundering Act (PLMA) 2002. This includes the exchange, transfers, safekeeping, and administration of virtual assets, as well as financial services related to an issuer’s offer and sale of virtual assets.

The PLMA obliges financial institutions to maintain a record of all transactions for the last ten years, provide these records to officials if demanded, and verify the identity of all clients. While the notification does not provide many details, it will complicate the life of crypto companies in India, as regulators worldwide are tightening AML standards for crypto.

This notification comes after the Indian government amended tax rules in March 2022, subjecting digital assets holdings and transfers to a 30% tax. This drove crypto traders to offshore exchanges and forced budding crypto projects to move outside India. Trading volume on major cryptocurrency exchanges across India dropped by 70% within 10 days of the new tax policy and almost 90% over the next three months.

In February 2023, Indian authorities again demonstrated their tough stance on cryptocurrencies with a preemptive ban on crypto advertising and sponsorships in the local women’s cricket league. This followed a previous ban for the men’s cricket Premier League, introduced back in 2022.

Despite the tough stance, India’s Finance Minister, Nirmala Sitharaman, urged international efforts to regulate crypto in 2023. While celebrating India’s first presidency of the G20, she called for a coordinated effort “for building and understanding the macro-financial implications,” which could be used to reform crypto regulation globally.

Overall, India’s implementation of AML standards on crypto will make it more challenging for crypto companies to operate in the country. However, the move is part of a wider global trend of regulators tightening AML standards for crypto, in an effort to curb illicit activities and promote greater transparency in the industry.


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India tests offline functionality of digital rupee

The Reserve Bank of India (RBI) is testing the offline functionality of its newly-launched central bank digital currency (CBDC), the digital rupee, according to Ajay Kumar Choudhary, the executive director of the RBI. The move comes after the RBI launched the wholesale segment pilot for the digital rupee on November 1, 2022, onboarding 50,000 users and 5,000 merchants for real-world testing.

Since the launch of the wholesale CBDCs, around $134 million worth of transactions have been completed as of February 25, with 800,000 transactions taking place. These figures indicate the growing popularity and potential use cases of CBDCs in India.

The digital rupee is expected to provide numerous benefits, such as reduced transaction costs, increased financial inclusion, and enhanced security features. The RBI aims to provide a digital alternative to the traditional physical currency, making transactions faster, cheaper, and more efficient.

With the offline functionality of the digital rupee being tested, users can continue to make transactions even in areas with poor or no internet connectivity. This is an important feature for a country like India, where internet penetration is still low in certain regions.

The pilot for the digital rupee has been launched in the wholesale segment, which caters to financial institutions and large businesses. However, the RBI plans to roll out the digital currency to the general public in the future.

India is not alone in its efforts to launch a CBDC. Several countries, including China, Sweden, and the United States, are exploring the possibility of introducing their own digital currencies. The rise of CBDCs is expected to have a significant impact on the traditional banking system, as they have the potential to change the way people store, transfer, and access money.

In conclusion, the testing of the offline functionality of the digital rupee is an important step towards the wider adoption of the CBDC in India. The wholesale segment pilot has already shown promising results, and the RBI’s plan to introduce the digital rupee to the general public could revolutionize the country’s financial sector.


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G20 To Establish Standards For Global Crypto Regulatory Framework

It was announced on February 25 by the group of the 20 largest economies in the world, known collectively as the G20, that the Financial Stability Board (FSB), the International Monetary Fund (IMF), and the Bank for International Settlements (BIS) will deliver papers and recommendations establishing standards for a global crypto regulatory framework.

The Financial Stability Board (FSB) is expected to publish its recommendations by July 2023 on the regulation, supervision, and oversight of global stablecoins, crypto asset activities and markets, as stated in a document that provides a summary of the outcomes of a meeting with finance ministers and governors of central banks.

The next set of guidelines is not anticipated to be released until September 2023. At that time, the FSB and the IMF are scheduled to jointly provide “a synthesis document incorporating the macroeconomic and regulatory aspects of crypto assets.” Another research on the “possible macro-financial ramifications of the broad adoption” of central bank digital currencies is scheduled to be published by the International Monetary Fund (IMF) in the same month (CBDCs). The following is an excerpt from the statement that was released by the G20: “We look forward to the IMF-FSB Synthesis Paper which will support a coordinated and comprehensive policy approach to crypto-assets, by considering macroeconomic and regulatory perspectives, including the full range of risks posed by crypto assets.”

Additionally, the BIS will provide a paper that discusses analytical and conceptual concerns in addition to potential risk reduction techniques associated with crypto assets. The text does not include any information on the deadline for this report. The use of cryptocurrency assets to finance terrorist operations will also be investigated by a financial task group established by the G20.

During the course of the event, United States Secretary of the Treasury Janet Yellen said that it was “essential to put in place a solid regulatory framework” for activities relating to cryptocurrencies. In addition to this, she emphasized that the nation is not advocating for a “outright ban on crypto activity.” In a brief conversation with reporters on the margins of the main event, the managing director of the IMF, Kristalina Georgieva, suggested that the G20 nations need to have the option of outlawing cryptocurrencies.


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G20 Discusses Crypto Regulations Under India Presidency

During the time that India presided over the G20, the first meeting of its kind for the group’s Finance Ministers and Central Bank Governors (FMCBG) was conducted. At this meeting, key issues pertaining to financial stability and regulatory oversight were discussed. India has urged the other member nations to acknowledge the macro-financial consequences of crypto assets and has advocated the development of a coordinated worldwide strategy. In addition, India has proposed the formation of a global strategy coordination group.

In light of the fact that cryptographic assets are traded all over the globe, Nirmala Sitharaman, India’s Finance Minister, has in the past voiced her support for the establishment of crypto regulations in collaboration with other countries. This story is now being told as part of the discussions that are being held in the mainstream while India holds the presidency of the G20.

During the 24th and 25th of February, members of the G20 gathered with the FMCBG to discuss the prospects of technological advances while placing a focus on finding a balance between the risks associated with such developments. Among the most significant subjects that were discussed during the G20 meeting were the significance of financial stability and regulatory goals, policy measures for boosting financial inclusion, and productivity increases.

Sitharaman expressed appreciation to individuals who supported efforts to modify rules pertaining to crypto assets in her closing remarks. To be more specific, the Minister of Finance asked for a concerted effort “for creating and comprehending the macro-financial ramifications,” which could be used to change crypto legislation on a global scale. Specifically, the Minister of Finance asked for a concerted effort “for creating and comprehending the macro-financial ramifications.”

She then continued by expressing her appreciation to the International Monetary Fund (IMF) for producing a thorough paper on the implications that crypto assets will have on the overall macroeconomic system. In her final comments, Sitharaman underlined the need of cooperation between the nations that are members of the G20 “to foster responsible technological breakthroughs and protect the stability of the financial system.”


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India UPI expanding services to Singapore

The Unified Payments Interface (UPI), which is India’s national payment network, is now merging with the PayNow quick payment system in Singapore in order to broaden the scope of its services beyond the boundaries of India. The service was inaugurated by Shaktikanta Das, governor of the Reserve Bank of India, and Ravi Menon, managing director of the Monetary Authority of Singapore, via the use of token transactions made possible by the connectivity between UPI and PayNow.

Through the integration of UPI and PayNow, users in both countries will have the ability to transmit money rapidly across international boundaries. It is possible to transfer or receive money from India by using merely a UPI-id, a cellphone number, or a virtual payment address for money that is housed in bank accounts or electronic wallets. The instant real-time payment method offered by UPI enables the quick transfer of funds between two bank accounts via the use of a mobile app.

At the outset, the State Bank of India, the Indian Overseas Bank, the Indian Bank, and the ICICI Bank will act as facilitators for outbound remittances. Both Axis Bank and DBS Bank India will work to make it easier to receive money sent from outside. Users in Singapore will get the service through DBS Bank and Liquid Group as the providers.

The ICICI Bank is also participating in the Central Bank Digital Currency (CBDC) scheme that is being implemented in India. The CBDC pilot program in India was first introduced in two stages: the first was in November 2022 for the wholesale sector, and the second was in December for retail consumers. Since the beginning of the pilot program, the digital rupee initiative has recorded 770,000 transactions that have been conducted by eight different banks. There are now five cities taking part in the experiment, and there is a possibility that nine other cities may join the study shortly.

“This is a significant value addition for India’s payment rails considering that there is close to 30 percent of the people in Singapore who are expatriates, and that they transfer money to India once a month or once every three months. Because of this integration, friction is eliminated, which in turn reduces processing time and costs.

The introduction of COVID-19 has contributed significantly, over the course of the previous several years, to the expansion of India’s digital payment infrastructure. However, the government is wary of cryptocurrencies and has imposed a tax of thirty percent on any earnings made from their use. This has caused big participants in the industry to leave the nation. The government, on the other hand, is eager to use blockchain technology for its CBDC program, with the expectation that current infrastructure would assist in scaling up its CBDC program.


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Algorand Foundation Expands its Presence in India

In India, the Algorand Foundation has announced a number of new partnerships, one of which is a cooperation with educational institutions to establish instructional programs that would assist in the expansion of Web3 in the nation.

According to Anil Kakani, who was recently appointed to the position of Algorand’s national head for India, the collaborations seek to generate a sustained effect. He elaborated as follows: “We are poised to take center stage in India and throughout the globe to power world-changing solutions to increase access to financial services, healthcare, education, and so many other essential applications.” This statement was made in reference to the country of India.

In addition to the educational market, the organization is actively pursuing opportunities inside the country’s newly established businesses. A relationship between Algorand and T-Hub, an innovation hub with headquarters in Hyderabad, was also revealed. According to Srinivas Rao Mahankali, the Chief Executive Officer of T-Hub, the cooperation would assist local businesses in gaining access to finance from all around the globe and in scaling their initiatives on a global level.

Additionally, the Algorand Foundation has joined forces with the Clinton Foundation to become a technology partner for their recently established Global Climate Resilience Fund. Local companies will get assistance in connecting with carbon markets and monetizing carbon credits thanks to the fund’s contribution. Seed funding and business acceleration programs will be provided by the company to female-owned and -operated companies in an effort to expand access to financial markets. “I am pleased to be back in India, and particularly to witness the acceptance and excitement by people throughout the nation for technology that can so drastically and positively improve their quality of life,” said Staci Warden, CEO of the Algorand Foundation. “I am thrilled to be back in India.”

Warden said that the collaborations would assist in bringing blockchain closer to its full potential and will assist the local ecosystem in creating an economy that is more welcoming to everybody.

The Algorand Foundation has been working hard to significantly expand its influence around the world. The business made the announcement on the 13th of December 2022 that it had been selected to provide assistance for a bank and insurance guarantees platform in Italy.


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Binance Bans WazirX From Using Its Services

The ongoing dispute between the global cryptocurrency exchange Binance and Zanmai, the operator behind the Indian cryptocurrency exchange WazirX, continues with a new blog post claiming that Binance is prohibiting WazirX from making use of its services. This is the latest development in the ongoing conflict between the two parties.

Binance published a statement on February 3 in which it recognised the continuing “public dispute” that it is having with Zanmai about Zanmai’s assertions that Binance is involved in operating WazirX. On January 26, Binance said that it has given WazirX the ultimatum of retracting its remarks and continuing to use Binance wallet services or terminating its use. WazirX chose to continue utilising Binance wallet services.

According to the notification, Zanmai did not reverse their statement, and the company now has until February 3, 2023 at 23:59 UTC to withdraw all of their cash from the accounts that are utilised for WazirX activities.

At the time this article was written, Binance explained that Zanmai had monies that are still present in Binance wallets that are being utilised for operational reasons.

This comes less than a month after WazirX disclosed that it stores 90% of the cash belonging to its customers in wallets associated with Binance, while the remaining 10% are kept in wallets associated with cold storage.

This declaration was made after a number of cryptocurrency exchanges published proofs-of-reserves in response to the issue involving FTX.

The biggest cryptocurrency exchange in India is called WazirX. In spite of this, it has been getting into trouble with the local authorities over the course of the last year. The Indian authorities accused the exchange of helping to launder around 130 million dollars worth of illicit funds.

During the time that the inquiry was ongoing, the exchange had froze the access to millions of dollars worth of user cash. It was at this time that Binance started openly distancing itself from the Indian exchange. This was done in the form of a tweet from the CEO of Binance, Changpeng Zhao, who stated that Binance does not control the exchange.

Binance quickly took the side of the Indian authorities conducting the investigation into WazirX and disabled the ability to conduct off-chain financial transactions with the exchange once this announcement was made.


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