India to investigate the prohibition of unbacked cryptocurrency during its G20 presidency

India announced on Thursday that as part of its ongoing G20 presidency, it will prioritise the development of a framework for global regulation of unbacked crypto assets, stablecoins, and decentralised finance, and will investigate the “possibility of [their] prohibition,” in what could be a significant setback for the nascent industry.

India took over the Group 20 presidency for a year earlier this month. The group, which includes 19 countries from four continents and the EU, accounts for 85% of global GDP. Non-member countries such as Singapore and Spain, as well as international organisations such as the World Bank and the IMF, are also invited. The Reserve Bank of India, India’s central bank, stated today in a report that crypto assets are highly volatile and exhibit high correlations with equities, contradicting the industry’s narrative and claims about virtual digital assets being an alternative source of value due to their alleged inflation-hedging benefits.