At the end of the G-20 Summit held in New Delhi in the second week of September, a joint declaration of the group countries was adopted. One of the main issues it it related to technology. This is important for the future of India. The declaration of the G20 has thus reflected that the world is moving fast in the direction of digital currency.
Given India's extraordinary and rapid progress in digitizing financial transactions, digital currencies are showing signs of opening up vast opportunities for India
India has not recognized crypto-currency. However, the government has decided to tax transactions in this currency in the Union Budget 2022. Although cryptocurrency is not in use in India, a 30 percent tax and 4 percent cess have been levied on transactions in this currency as digital virtual assets.
The initiation of taxation on a transaction can be considered the main step in regulating transactions. The G20's Delhi Declaration mentions crypto as a priority. The group of countries is closely monitoring the risks in the crypto asset ecosystem, the manifesto said. The G20 insists that crypto rules should be global.
No single country's government controls the current -. Crypto transactions are held by private companies. The modern world has never experienced a situation where the currency is in the hands of private companies. The banking system originated in Northern Europe in the sixteenth century.
It stabilized by the eighteenth century and in the last two centuries the system became global. That country's government created the banking system's laws and kept the currency transactions under its control. Crypto has only touched the transaction of this currency.
With or without government recognition as a currency, it's been five years since the crypto boom. Given the advancements in technology, rapid digitization, and ease of transactions, it will not be possible for the world to stay away from crypto for long. The first steps in that direction have been taken in the G20.
Need for new currency
Banking was not an industry set up by the government. The government had created a system to regulate banking. The same thing is now showing signs of happening with crypto. 2021 has been the busiest year for crypto-currency. That year, transactions worth tens of billions of US dollars were transacted in crypto-currencies.
Ambiguity in the regulations of this currency, completely dominated by private companies, and ignorance of the transactions also encouraged fraud. As a result, the crypto-currency began a downward spiral in 2022.
Transactions in crypto-currency took place in 2023; However, it lacks the vigor of two years ago. Nevertheless, the usefulness of this currency is understood worldwide. It has also been realized that fraud can be prevented if these transactions are regulated and more transparent. As a result, crypto may be rebranded with a new name from the Delhi Manifesto.
Learning from crypto transactions, governments of different countries are now looking to introduce digital currency for their central government banks. These currencies are the incarnation of crypto itself, But they are issued by the government. Moreover, the government has also fixed the price of these currencies. Therefore, it is expected that there will be smoothness in the exchange.
The Delhi Declaration of the G20 has reflected the digital currencies of these central banks. The announcement welcomed the launch of a central bank digital currency.
The G-20 countries expect that there should be more discussions on the effects of this currency, especially on the transactions with foreign countries and the overall financial system, and the doubts should be resolved. This means the time to start transactions under the name Central Bank Digital Currency (CBDC) instead of cryptocurrency is on the horizon.
This change in currency could radically change the current order of the world. Existing cryptocurrencies are mainly dominated by US private companies. It is a technology-based currency. Even today, Indian companies dominate technology creation, maintenance, and use. The world is in awe of the digitization of financial transactions in India in the last six years.
That is why the manifesto reveals that India has placed more emphasis on the spread of digitization in the G20. Be it startups in agri-tech or responsible use of artificial intelligence (AI), areas where there is an opportunity for technological development is strongly included in the manifesto.
Regulation of 'AI' has been talked about repeatedly in the last two years. Delhi Manifesto is no exception. However, it is important to note that the G20 countries in Delhi have pledged to make the use of AI in the digital economy available to all. The 'open-source' approach has played a major role in the advancement of technology over the past two decades.
Information is added if it is made available to all, not limited to ourselves. There are two decades of experience in improving and ultimately creating something of use to all. A proposal has been made in Delhi to apply the same methodology to digital financial transactions.
Risks and Opportunities
The politics of the 'G20' summit and accordingly the Indian politics have been discussed for the past month and will continue to be so. Politics will continue at the pace of politics; however, the changes taking place in technology have a major impact on our entire environment. On the occasion of 'G20', it is imperative to discuss the upcoming currencies.
The benefits should be discussed as well as the risks. If such a discussion does not take place in a gigantic country like India, 'informed' and 'informed' elements are created in the society, which has far-reaching effects on the society.
India embraces digital transactions with confidence and therefore now maybe at the forefront of digital currency shortly. It will open up endless transaction opportunities. Those opportunities are very important from our point of view. From that point of view, we should look at the issue of technology in the 'G20' manifesto.
Samrat Phadnis is the Editor, Traditional & Digital Media, Sakal Media Group, Pune, Maharashtra