The advent of cryptocurrency welcomed chaos in the world of finance. Thanks to the lack of regulations and decentralized nature of cryptocurrencies, the industry was filled with ambiguity which resulted in various financial crimes across the globe. However, the free rein of cryptocurrency is now coming to an end. The credit goes to Organisation for Economic Cooperation and Development (OECD).
With the Organisation for Economic Cooperation and Development (OECD) finalizing the cross-border reporting framework for crypto assets, sources in the know say that various countries are now considering finalizing the dimensions of its regulations including India. India’s G20 chairmanship beginning in December 2022 has boosted the country’s cryptocurrency industry. India’s Finance Minister Nirmala Sitharaman, as well as the Reserve Bank of India (RBI), have already emphasized the significance of a worldwide framework for crypto regulation. The crypto sector believes that India’s G20 chairmanship will give a chance to further that cause. In response to a request from the G20 finance leaders, the OECD created a framework this week for the automated exchange of information between nations on crypto assets.
The new transparency project was established in collaboration with G20 countries, and it comes amid increased adoption of the usage of crypto assets for a wide range of investment and financial purposes, despite recent market instability dampening crypto investing significantly over the last year. Unlike traditional financial goods, crypto-assets may be transferred and stored without the interference of traditional financial intermediaries such as banks, and without any central administrator having complete knowledge on either transactions or crypto-asset holdings, according to the OECD. The cryptocurrency market has also fueled the growth of new intermediaries and service providers, such as crypto-asset exchanges and wallet providers, many of which are still unregulated.
The report also defined crypto assets. Crypto assets “includes assets that can be held and transferred in a decentralised manner, without the intervention of traditional financial intermediaries, including Stablecoins, derivatives issued in the form of crypto assets, and certain non-fungible tokens (NFTs)”.
In conclusion, the OECD Regulations mean the arrival of a more strong and comprehensive regulation related to the crypto sector in India.