India FM Nirmala Sitharaman calls for global blockchain regulation
India’s Finance Minister Nirmala Sitharaman has repeated her desire to see digital currencies and their underlying blockchain technology globally regulated under a common standard.
In an interactive session with industry stakeholders, Sitharaman noted that the global regulatory plan for digital assets does not mean that the government controls the industry.
She clarified that the purpose of an international regime is to protect millions of investors and reduce the activities of the industry’s bad actors.
“All of us have to work together on it, otherwise regulating crypto may not be effective. It doesn’t mean we control the distributed ledger technology,” Sitharaman said. “It has its goodness, it has its potential, it has its own strengths. We have that in mind.”
As president of the G20, India has indicated that creating a global framework for digital assets is at the top of the agenda. Since the announcement, there has been speculation that digital currency regulation could be draconian, given the country’s treatment of its local industry.
India’s relationship with digital assets can be described as frosty, underscored by whispers of a blanket ban and a shrinking Web 3 talent pool. Things took a wild turn after the government imposed a 30% tax on digital assets plus a 1% withholding tax.
Furthermore, Indian investors are not allowed to offset losses against gains, and all efforts by a coalition of stakeholders to influence the government to reduce its policing of the industry have been abandoned.
Plans to create a global regulatory framework for the rest of the G20 nations are underway, with the coalition’s central bankers and finance ministers meeting in India to explore draft legislation. A new meeting is planned for July with the group concerned with exploring the reports from the International Monetary Fund (IMF) and the Financial Stability Board (FSB).
“So if you were to regulate here and not elsewhere, it will just flow like that and continue to backfire on you,” Sitharaman said. “It won’t be effective.”
India’s unwavering faith in blockchain
Sitharaman revealed that the Government of India believes that blockchain adoption in the country could reach 46% before 2026, and said that the government is aware of its myriad benefits to the local economy.
As part of efforts to trigger adoption, the National Institution for Transforming India (NITI) Aayog recently launched a citizen blockchain module in partnership with tech giants 5ire and Network Capital to deepen the talent pool.
Several Indian universities have started offering blockchain courses in collaboration with advocacy groups such as the India Blockchain Alliance, while municipal governments are adopting the technology to streamline their processes.
See: Bangalore and blockchain – the synergy is there
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