Regulation in crypto market is one of the most discussed topic these days and specially after the G20 summit money media channels are discussing the same because they expect that India is going to lead it. India has been talking about it for sometime that they expect the crypto to be regulated but a global framework is required. One country cannot take any action on crypto and this is why they are looking for the global agreement and G20 can be the best group of countries to have consensus.
IMF (international monetary fund) and FSB (Financial Stability Board) I worked together to draft a document in which they discussed about the regulation are cryptocurrencies. This document has not been revealed in public but some of the points are discussed independent media channels. The overall trucks is that they want cryptocurrencies to be regulated. I have gone through the I am a website and found an article in which they have talked about various parts related to the regulation for crypto.
Some Key Elements of Crypto Regulation
Crypto assets, including stablecoins, are not globally systemic, but in some emerging market economies, they might be on the verge of generating risks to financial stability. Some of these countries are seeing large retail holdings and cryptoization, or currency substitution by crypto assets. Cryptoization has the potential to lead to capital outflows, and a loss of monetary sovereignty, thereby creating new challenges for policy makers. Authorities need to address the root causes of cryptoization to improve trust in domestic currencies, in domestic banking system, and in domestic economic policies.
This is a very detailed article in which the international monetary fund director has tagged about different aspects for financial stability. Desi crypto as one of a thread to the global financial system and this is region why they want to control it through the regulation. Crypto is something that should be decent lies but I doubt that after we have regulation in place then this decent lies will not be effective anymore. As of now it's too early to say how things will be but most likely it is expected that the government would have control even on the non custodial wallets. It simply means that whatever transactions you are doing on your non custodian wallets will be tracked by the government and of course whenever you have submitted the KYC on any Central exchange is anyways going to be tracked.
The possibility to see a multifold option on the value will not be happening post that because the government will bring multiple controls. It is going to be a similar situation that stock market has as of now where nobody can talk anything which is not approved by the authority. For example you cannot suggest a bunch of stocks to buy under it is authorised by the SEBI in India. SEBI is one of the organisation in India that manage the stock market and they are the ones creating different policies to have a control on this.
If we are expecting that post regulation in crypto market, we are going to have a free environment where we can trade or transit whatever we like then I don't think it is going to happen. If government will try to keep an eye on everything while controlling it through the regulation then I don't think we will have a decent lies environment in crypto that means the growth we have seen in the past will not be repeated.
I expect that the value of digital assets will grow but sometimes we see a significant growth on some projects which I think will not be possible because government is going to control that. For example as of now nobody can manipulate the stock market because they have certain rules and whenever they see something out of the box happening in the market then upper all over circuits are applied to control the manipulation and this is how they try to protect but also keep it within the limit.
Even in India if you talk about the regulation then we cannot say how is it going to be but as an example we have seen that how the government created the tax environment. I am sure they know that what they have implemented as part of the taxation and how it is going to kill the industry so if they come up with something on the same theme then for sure India is not going to go in crypto market because this will discourage the adoption. This week a report has been published in which India is on top in terms of crypto adoption and this regulation is also going to be a game changer. If it is positive then we can expect the rate of adoption going hi but if it is not then it is going to be another way round.
Thank you