by Shouvik

This spotlight on decentralization doesn’t come as a surprise to anyone following India’s growing interest in building legislation around the blockchain industry. Just a year ago, in their 2022 national budget, the Indian government imposed its first major tax on crypto. And now, as their final act as president of the G20 nations, they have inevitably reignited talks arounds the subject.

“A single country cannot regulate crypto currencies effectively. We have discussed the building blocks for such regulation and a road map, arrived at in consultation with the International Monetary Fund (IMF) whom we roped in to advise on macro-economic implications of these assets and the Financial Stability Board to focus on regulatory concerns,” remarked an official when asked for their take by journalists from The Hindu.

This comes at the heels of the Indian government’s serious consideration of a blanket crypto ban; further proving the diplomatic pull of G20 as well as the overall positive global attitude towards crypto.

There is a consensus among the G20 members concerning the immediate need for a regulatory framework around this technology. Some think of this as a way to support the growth of crypto, while most see this as an opportunity to control it. Either way, the new frontier of digital transactions is now under the scrutiny of centralized forces.

If the past is any indication, making policies around breakthrough technology like blockchains is not going to be the easiest of tasks. We have already seen attempted blanket bans go horribly wrong. However, there is at least an indication that the IMF is now willing to work with crypto instead of completely ignoring it.

For example, one of the key recommendations on the IMF blog is, “to protect national sovereignty, it is important not to grant crypto assets official currency or legal tender status. Doing so would require accepting them in many jurisdictions for tax payments, fines, and debt settlements, and could generate fiscal risks for government finances, and could threaten financial stability or rapid inflation.”

While at face value, this proposition seems like a step to avoid integrating crypto into national infrastructures; in context, it’s also an acknowledgement of crypto having a major role to play in the future of finances.

The actual impact of increasing global interest in building policies around crypto is yet to be seen. But as blockchain technology aims to alter the very fabric of global finances, it is bound to draw the eyes of both visionaries and traditionalists. Ultimately, the future of crypto will be decided by whichever of these two groups is in power in the years to come.