Developing World’s Crypto Worries Could Get G20 Attention

NEW DELHI : Many developing countries differ from developed countries on legitimizing cryptocurrencies globally as a payment alternative, as their cryptic and borderless nature could decimate their sovereign currencies in favor of the dollar, said two people familiar with the development, citing possible talking points at the G20 summit.

The concern is shared globally and is among the key issues to be discussed at the G20, including under India’s presidency, the people said on condition of anonymity.

“It is natural for the United States to support cryptocurrencies because they are based in this country, they wield enormous influence, and they are valued primarily in US dollars, promoting dollarization, which may not be acceptable to all. country. Therefore, a thorough deliberation on this matter is expected at the G20,” said a senior official with direct knowledge of the matter.

Cryptocurrencies follow a decentralized architecture, which makes their trade difficult to control across jurisdictions, even by the volunteer group that governs most cryptocurrency development. Much of the control is exercised by exchanges, which are spread around the world.

During her visit to New Delhi on November 11, US Treasury Secretary Janet Yellen, without mentioning cryptocurrency, raised the issue of digital payment systems: “It is also clear that economic integration in the 21st century requires a modern international payment system. Cross-border payments should be cheaper than they are today. They also need to be faster, more transparent and easier to access. The G20 has defined a roadmap to improve cross-border payments. We look forward to working with India to achieve tangible results.”

The second official mentioned above said that India has not yet taken a position on this matter and that it will only be confirmed after careful deliberations. “One thing is clear: India will embrace the technology. He is also in favor of a digital payment system regulated by the Reserve Bank of India. But RBI opposes any digital asset replacing sovereign currency for the financial stability of the country. Let’s see what the consensus is at the G20,” he said.

On October 31, HT announced that crypto-assets, including cryptocurrencies, are expected to be one of the main items on the agenda of the G20 financial track when India assumes its presidency in December. On November 1, Finance Minister Nirmala Sitharaman said digital assets will be discussed at the G20.

Amanjot Malhotra, Country Head, India, at digital asset exchange Bitay, said “a lot of regulations” are expected for crypto assets, especially after the collapse of FTX, a major cryptocurrency exchange. .

He said “a different approach at the G20 summit” is expected on this issue by different countries.

FTX, the second-largest cryptocurrency exchange by traded volumes until recently, filed for bankruptcy earlier this month. “Cryptocurrencies are viewed differently by different countries. Developed countries like the United States try to regulate it as an asset class as much as they can, which is great for both retail and institutional investors. On the other hand, we have…developing countries with weaker currencies trying to use them as a mode of value transfer,” he said.

Rajagopal Menon, Vice President of WazirX, said cryptos could have a “transformative” effect in developing economies by increasing financial inclusion. “Cryptos are a great hope for the unbanked masses. An internet connection is all you need to start participating in a formalized economy.”

Archit Gupta, Founder and CEO of Clear (formerly ClearTax), said, “Cryptocurrency is used everywhere as virtual currency, and if used as ‘payments’, it could indeed undermine sovereign currency if it doesn’t. is not regulated”.

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