Regulating crypto without global consensus will not be effective: Nirmala Sitharaman

Underscoring that global consensus is needed for crypto regulation before India decides to do so, Union Finance Minister Nirmala Sitharaman said on Sunday that a global template may have to be created and everyone has to work together on it, otherwise such regulation will not be efficient.

However, the minister said regulation does not mean controlling “distributed ledger technology”, which has “its benefits and potential”.

“It was India’s proposal (regulatory consensus) and it has been included. I am glad that the G20 has kept it on its agenda for this year. The IMF has published a paper on cryptocurrency and how it can affect macroeconomic stability Financial Stability Board (FSB ), which was set up by the G20, has agreed to release a report that will also focus on financial stability (sic),” Sitharaman said.

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“Their (FSB) report and the IMF’s report are going to be discussed in July when finance ministers and central bank governors meet during the G20 and post that in September there will be a summit of prime ministers and presidents of G20 nations that will be held in India,” said she.

The minister was responding to a question on regulation of digital or cryptocurrency during the ‘Thinkers Forum, Karnataka’ summit. The first G20 Finance Ministers and Central Bank Governors (FMCBG) meeting under India’s presidency was held from 24 to 25 February in Bengaluru.

“The underlying principle is, because the digital currencies are completely digitized and technology-driven, the technology is very distributed and sometimes identity is very difficult to establish – but which has potential – it will therefore only have to be traded in relation to all countries that come. about table,” Sitharaman said.

“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, otherwise it will not be effective,” she said.

Read also | G20 consensus that crypto asset regulations must be global: FM Nirmala Sitharaman

Furthermore, noting that the understanding in the G20, along with the OECD (Organization for Economic Co-operation and Development) and other organizations such as the IMF, the World Bank and so on, is that a global template may need to be created, the minister said. “All of us have to work together on it, otherwise crypto regulation cannot be effective.”

“But that doesn’t mean we control the technology of distributed ledger technology – it has its goodness, potential and its own strengths. We keep that in mind (sic),” she added.

Asserting that India is today being appreciated by the global community for the way it steered its own course through the pandemic, the Russia-Ukraine war and its spin-offs, Sitharaman said that inflation in India today is largely “imported” due to international prices of fuel and fertiliser.

“So you bring everything in, while your own cause of inflation may be the supply side – there is inflation in India, we are aware of it and all governments are fighting it. But today the pressure on inflation in India is largely due to the imported price hikes (sic),” she said, adding that “amidst all this, Prime Minister Narendra Modi has ensured that people of India will not suffer”.