Indian Finance Minister: Crypto Regulation Needs Global Consensus

Indian Finance Minister Nirmala Sitharaman advocates for global consensus on cryptocurrency regulation, highlighting the need for international cooperation, particularly within the G20. She noted that while Indian regulators have differing opinions regarding how to treat crypto, there is currently no significant confusion.

Indian Finance Minister on Crypto Regulation

Indian Finance Minister Nirmala Sitharaman stressed the need for global consensus on cryptocurrency regulation in an interview with Businessline, published Monday. She highlighted the importance of international cooperation, especially within the G20, to address crypto regulatory challenges.

“Even before G20 and since 2020, we had discussions about it in the Finance Ministry,” Sitharaman explained, adding that India’s central bank, the Reserve Bank of India (RBI) “is also having its own view on it.” The finance minister emphasized:

We are very clear that there should be global understanding on how to regulate crypto.

Discussions within India’s Finance Ministry and collaboration with the International Monetary Fund (IMF) and the Financial Stability Board (FSB) regarding crypto regulation have been ongoing. Sitharaman believes unilateral regulation is ineffective due to the borderless nature of cryptocurrency.

“During G20 under India’s Presidency, we spoke about it. We brought IMF and FSB. Well-written papers were submitted. A lot of discussion took place. I would like to go through the route of global understanding when everybody is on the same page,” she stressed. “Bringing a regulation just within one country without a global understanding on a technology that does not brook any borders is not going to help. On cryptocurrency, no single country would succeed even if intends to.”

When asked if there is any confusion among Indian regulators, with some opposing crypto and others discussing regulation, she replied that there is no such confusion. Sitharaman clarified:

These are opinions, no harm in that. We have not yet reached a stage where we are saying: ‘yes, this is what we want to do.’ At that stage, if there are differences among regulators then that would be a matter of concern. We are nowhere near that situation.

Last week, the Securities and Exchange Board of India (SEBI) provided a government panel with its recommendations on crypto asset regulation, advocating for different regulators to oversee various facets of cryptocurrency trading. Concurrently, the Reserve Bank of India also submitted its view on crypto. The central bank expressed its concerns, highlighting the macroeconomic risks associated with cryptocurrencies and emphasizing issues related to tax evasion and fiscal stability.

India currently does not have a dedicated regulatory framework for cryptocurrencies. In 2021, a government panel created a draft bill to regulate digital assets, but it has yet to be introduced. The Financial Intelligence Unit – India (FIU-IND) monitors 47 cryptocurrency-related entities and has recently authorized crypto exchanges Binance and Kucoin as virtual asset service providers. In March, the Indian finance minister revealed her expectation that a regulatory framework for cryptocurrencies would be developed through G20 discussions.

What do you think about Indian Finance Minister Nirmala Sitharaman’s call for global consensus on cryptocurrency regulation and her emphasis on international cooperation through platforms like the G20? Let us know in the comments section below.

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