Regulation of crypto needs global template, says FM Nirmala Sitharaman

A “global understanding and template” is needed to regulate cryptocurrency, Union Finance Minister Nirmala Sitharaman said on Sunday.

She was speaking at an interaction program organized by Thinkers Forum, Karnataka.

“No country individually in a matter of technology-driven crypto-assets can effectively control it because the technology has no borders,” Sitharaman said. “So, the very nature of it being technology-driven requires all countries to be on board. If you were to regulate here and not elsewhere, it’s not going to be effective,” she said.

Read also | Crypto problem requires immediate attention, says FM Sitharaman

That doesn’t mean India is in favor of “controlling” the technology that powers digital currencies, Sitharaman said. “The distributed ledger technology has its goodness, potential and strength. We keep that in mind,” she said.

According to Sitharaman, platforms such as the G-20, the Organization for Economic Co-operation and Development (OECD), the International Monetary Fund (IMF) and the World Bank recognized the need for a global effort. “All of us must work together. Otherwise, regulation of crypto cannot be effective,” she said.

The minister pointed out that the G-20 under India’s presidency has kept digital currencies on its agenda. “The IMF has also issued a paper on crypto and how it can affect macroeconomic stability. The Financial Stability Board (FSB) has also agreed to issue a report. The FSB and IMF reports will be discussed in July when finance ministers and central bank governors will meet ,” she said. “In September, there will be a summit of Prime Ministers and Presidents of G-20 nations in India.”

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

Sitharaman explained that digital currencies involved technology that is “very distributed” where “sometimes it is difficult to establish identity”.

“No plan to regulate finnfluencers”

To a question, Sitharaman said there is no proposal to regulate financial influencers or financial influencers. “At this stage I have no proposal before me to regulate financial influencers. Social influencers and economic influencers are all out there. But a very strong sense of caution is required in each and every one of us to make sure we double-check, cross-check and talk to people,” she said, referring to financial advice given by fin-influencers.