Will G20 Summit Unlock Crypto For 1.4 Billion Indians?

As India prepares to host the G20 summit in September, crypto regulation is a hot topic.

While the event won’t be the first time world leaders have discussed crypto regulation, the past year has seen the conversation evolve significantly.

Crypto regulation remains a hot topic

Since the last G20 summit in July 2022, a number of countries have moved to regulate the crypto sector. The EU has adopted its landmark MiCA regulation. Britain has turned its attention to space.

And the US Congress has taken an increasingly proactive stance in shaping the country’s crypto regulation.

Meanwhile, from Nigeria to Hong Kong and from South Africa to the Bahamas, lawmakers have spent the past year increasing oversight of crypto firms.

India is using its G20 presidency to push for crypto regulatory alignment

As the UN now estimates that India is home to the world’s largest population, the country has an opportunity to lead the conversation.

Already, the government is in the middle of introducing dedicated legislation in the form of the cryptocurrency and regulation of official digital currency bill. Additionally, in its 2022 budget, India’s lower house brought digital assets including cryptocurrencies and NFTs within the tax regime.

However, the government has recognized that effective taxation and regulation will require international agreement.

In remarks to Parliament last year, Finance Minister Pankaj Chaudhary observed that Crypto assets are inherently borderless. As such, he argued that any legislation can only be effective with international cooperation. To that end, he called for a “common taxonomy and standards.”

Chaudhary’s remarks point to a growing consensus among politicians that crypto regulations should not be written in national silos. If they are to be adapted to existing international trade agreements, a common language and set of definitions is needed.

To that end, earlier this month, India’s Finance Minister revealed that the government is pushing to create a global policy approach to crypto.

He also noted that during India’s G20 presidency this year, several discussions on the topic have been planned.

How can cryptocurrency promote financial inclusion in India?

A successful G20 summit could encourage member states to commit to only greater regulatory alignment. By harmonizing their approaches, G20 nations will enable closer cooperation on tackling money laundering.

At the same time, clear guidelines for international businesses can be an advantage for innovation and adoption.

Moreover, bank account holdings remain low in India and many people are underserved by the traditional financial sector.

As such, crypto products can empower the economically excluded. And with the growth of digital infrastructure in the country, crypto finance offers an efficient way to serve these populations.

Crypto, alternative payment and savings products can fulfill many of the functions of bank accounts and payment cards. But while these can be hard to come by, receiving and sending cryptocurrency only requires a working crypto address.

Already, India has some of the highest crypto adoption rates among the G20 nations. In fact, a survey found that 8% of respondents in the country reported owning Bitcoin (BTC). Meanwhile, Chainalysis’ 2022 Global Crypto Adoption Index ranked India fourth in the world.