Nirmala Sitharaman advocates global consensus on crypto

Indian Finance Minister Nirmala Sitharaman, during a series of events held in Bengaluru, India, emphasized the importance of having a global consensus for the regulation of cryptocurrencies.

Sitharaman believes that a universal consensus is essential to effectively regulate private digital assets while still allowing the use of digital assets to operate freely.

In India, crypto-assets still remain unregulated and the government does not register crypto exchanges. Sitharaman explained that since digital assets are borderless and require international cooperation, any regulation of them would require the consent of each nation.

Additionally, India has included regulation of digital assets as an agenda item for this year under its G20 presidency. By including this issue on the agenda, India is advocating for global cooperation to establish an effective framework for the regulation of cryptocurrencies.

Sitharaman stated:

No country individually, in a matter of technology-driven, crypto-assets, can effectively control it, because the technology has no borders, it can only pass through. So the very nature of it being technology driven requires all countries to be on board or it won’t be effective.

The minister made it clear that this did not involve control of “distributed ledger technology.”

Impact of Crypto on Macroeconomic Stability: IMF

India currently holds the presidency of the G20 and it was their proposal to include cryptocurrency regulation on the agenda, a proposal that was accepted by the board. The G20 has kept this topic on its agenda for the year, and the International Monetary Fund has published a paper on the potential impact of private digital assets on macroeconomic stability.

In addition to this, the Financial Stability Board (FSB), which was established by the G20, will also provide a report on financial stability related to cryptocurrencies.

As a result, India will host a summit in September that will bring together presidents and prime ministers of the G20 to discuss the issue of digital asset regulation. This summit gives India an opportunity to lead the discussion on the challenges posed by cryptocurrencies and establish a framework for their regulation.

The Finance Minister also added:

The underlying principle is, because digital currencies are fully digitized and technology-driven, the technology is very distributed, and sometimes identity is very difficult to establish, but it has potential, so it will just have to be traded with all comers. on board.

India’s G20 presidency will be closely watched for any positive developments in digital asset regulation.

She noted:

Recognizing the risks associated with the private virtual assets, the G20 nations moved a step closer to developing a coordinated and comprehensive policy approach to manage crypto-assets by considering macroeconomic and regulatory perspectives.

India’s central bank, The Reserve Bank of India, had maintained a draconian view on cryptocurrencies with RBI Governor Shaktikanta Das advocating for strict measures. His statement previously suggested that private cryptocurrencies should be banned altogether, warning that their uncontrolled growth could lead to the next financial crisis.

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