
One year after India’s G20 Presidency, the global landscape of crypto and virtual digital assets (VDA) has witnessed significant advancements, with several G20 nations implementing robust regulatory frameworks. However, India lags behind, failing to fulfill its commitment to regulate the sector effectively. Despite leading the G20 in 2023 and making ambitious declarations, India’s inaction highlights the urgent need for a coherent regulatory framework.
While India hesitates, other G20 nations have moved forward. For instance, Argentina passed a tax amnesty law in June 2024, bringing crypto assets under its tax framework to attract investments. Brazil is working on stablecoin and asset tokenization regulations, set to roll out in 2025, alongside updated systems to track crypto investments.
Australia has made notable progress with its Digital Assets (Market Regulation) Bill and plans for a formal framework for stablecoins by 2025. The European Union’s Markets in Crypto-Assets (MiCA) framework sets a high benchmark, with France introducing stricter licensing for service providers and attracting global stablecoin issuers. Similarly, the UK has outlined a phased roadmap emphasizing consumer protection and oversight, with milestones extending to 2026.
Countries like Germany, Italy, Canada, and Indonesia are harmonizing national laws with international standards. Germany and Italy have added insolvency safeguards, while Canada requires crypto trading platforms to register with its regulatory body. Indonesia is transitioning crypto regulation to its securities authority by 2025, ensuring stricter oversight.
East Asian nations such as Japan and South Korea are leading with innovative policies. Japan’s tax rationalization and promotion of Web3 technologies demonstrate a forward-looking approach. South Korea’s Virtual Asset User Protection Act, effective since July 2024, defines virtual assets clearly, ensuring a legal framework for innovation and compliance. Even South Africa, traditionally slow to regulate crypto, has introduced anti-money laundering (AML) rules and plans for stablecoin regulations.
Meanwhile, Russia has legalized crypto mining and allowed its use for international payments, showcasing a pragmatic response to economic challenges. These steps starkly contrast with India’s inaction, which hampers opportunities for innovation, foreign investment, and user protection in its growing digital economy.
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The IMF-FSB Roadmap emphasizes the need for a unified approach to safeguard financial stability, foster innovation, and enhance consumer protection in the crypto sector. Globally, countries are aligning with directives like FATF Recommendation 16 and ISO 20022 standards for better transparency and interoperability. India, however, risks marginalization by delaying regulatory alignment, losing credibility in an increasingly interconnected financial ecosystem.
As India reflects on its G20 Presidency, the need for decisive action on crypto regulation has never been more critical. Implementing prudential norms and a clear licensing regime is essential to safeguard investors and foster innovation. While the announcement of a Discussion Paper on crypto was a step forward, the lack of follow-through reflects a concerning policy inertia. This delay could result in missed opportunities and reputational damage, highlighting the need for India to act swiftly to maintain its standing in the global financial landscape.