International legal bodies can join forces by developing ‘coherent’ defy laws.

The preliminary approach to formulating crypto-specific guidelines comes as a break after years of discussion by the Reserve Bank of India, which initially imposed a complete ban on the sector.

The Indian government may have scrapped its plan to throw a blanket ban on crypto, but there's still a long way to go, and the latest developments show that the country's approach has been a bit of a rollercoaster ride.

“Positive precedent” for the world.

India's financial regulators realized that regulating this domain required cooperation across national borders. The alternative is a full attempt to monitor and control every device connected to the Internet.

Thus, India started to open dialogue with relevant stakeholders to chart a way forward. This year, India played the role of chairing the G20, giving it a unique opportunity to shape global financial policies, especially cryptocurrencies.

The G-20 leaders' statement officially endorsed the recommendations of the Financial Stability Board (FSB) to regulate and regulate activities related to crypto-assets. They also accepted the integration paper presented by the International Monetary Fund (IMF) and the FSB.

This report outlines a roadmap for a unified regulatory framework that takes into account a range of risks, including those specific to emerging markets and related to money laundering and terrorist financing.

Zebpay CEO Rahul Pagidipati said the proactive approach to developing crypto-specific guidelines is a welcome sign. In a chat with CryptoPotato, he said the next few years will be critical for the industry.

India's presidency of the G20 marks a significant step towards establishing an integrated global regulatory framework for the crypto industry, Pagidipati added. Although the initiation of crypto-specific discussions is expected to set a “positive precedent”, there is still a long way to go in developing regulations for the crypto sector.

The bone of contention with DeFi regulations

Many countries around the world have taken active steps in establishing cryptocurrency regulations, overcoming even initial skepticism. However, the same level of regulatory due diligence does not extend to the decentralized finance (DeFi) sector. In the United States, their strategy was to take a strong stance by first enforcing regulations and passing certain laws.

In an effort to regulate the decentralized finance sector (DeFi), the International Organization of Securities Commissions (IOSCO), the authority on securities market standards, recently launched a consultation by the end of the year to address its policy recommendations. Risks related to market integrity and investor protection in DeFi.

The DFI sector has disrupted many of the basic principles of traditional financial regulation, which has traditionally been based on identifying a central individual or entity tasked with ensuring market fairness and investor protection. Therefore, it is a difficult matter to determine who is responsible for controlling the position.

In this regard, the CEO of the Indian Crypto Exchange stressed,

“World-class international legal entities can collaborate with blockchain and crypto organizations to develop unified regulations without stifling innovation. This will lead to common standards, clear and comprehensive guidelines, and enforceable laws.”