India's G20 presidency puts crypto asset regulation in the spotlight: FM Sitharaman
FM Nirmala Sitharaman emphasises secure systems' critical role in fostering trust and ensuring the flourishing of the financial ecosystem globally
cryptocurrency
Highlights
- FM Nirmala Sitharaman stresses over global crypto regulations at Global Fintech Fest
- Cryptocurrencies could not be regulated efficiently without the cooperation of all countries
- Sitharaman and US Treasury Secretary, Yellen, discussed strengthening multilateral development banks, addressing global debt vulnerabilities, and crypto assets at G20
India's Finance Minister, Nirmala Sitharaman, announced in her keynote speech on Tuesday at the Global Fintech Fest (GFF) held in Mumbai that discussions are in progress for establishing a worldwide regulatory framework for managing crypto assets. She emphasised the necessity for international collaboration, highlighting that efficient cryptocurrency regulation necessitates collective cooperation.
Nirmala Sitharaman said, "India's (G20) presidency has put on the table key issues related to regulating or understanding that there should be a framework for handling issues related to crypto assets."
G20 efforts to regulate cryptocurrencies
India’s attempt to regulate cryptocurrencies, the International Monetary Fund (IMF) and the United States (US) supported India in February 2023 while it was holding the G20 presidency.
Smt @nsitharaman delivers the inaugural address at the Global Fintech Fest 2023 on the theme 'Global Collaboration for a Responsible Financial Ecosystem: Inclusive, Resilient, and Sustainable' in Mumbai, Maharashtra. pic.twitter.com/muiigrCs4h
— Nirmala Sitharaman Office (@nsitharamanoffc) September 5, 2023
In order to address problems relating to cryptocurrencies like Bitcoin, India stated its intention to promote a global collaborative approach. In order to assist discussions about creating a uniform framework, the Finance Ministry also announced that it had hosted a seminar for G20 members.
Recognising the global nature of cryptocurrencies, India has called for a cooperative approach to regulate them effectively. Building upon discussions and input from the IMF and the FSB, a roadmap for regulation is being developed. In this process, coming up with progressive regulations that considers the viewpoints and concerns of a wide range of stakeholders is essential. These measures have the potential not only to enhance investor confidence within India but also on a global scale, thus facilitating improved financial inclusion and fostering innovation in the financial sector.
Global financial ecosystem threats
FM Nirmala Sitharaman emphasised the importance of addressing various threats to the global financial ecosystem, encompassing physical border issues, cyber threats, challenges posed by cryptocurrencies, the proliferation of drug-related problems, tax havens, the circular movement of resources, and tax evasion.
Money laundering laws over cryptocurrency
In March, the Indian government announced the extension of its anti-money laundering regulations to encompass cryptocurrency transactions. According to the notification issued, these regulations will now encompass activities such as converting virtual digital assets into fiat currencies, exchanging between various virtual digital assets, and transferring digital assets.
India is still in the process of formalising cryptocurrency-related rules and regulations, despite repeated warnings from the Reserve Bank of India. The country’s central bank has advocated for a ban on cryptocurrencies, likening them to Ponzi schemes.
Sitharaman & Janet Yellen's talks on global finance
Back in February, during the G20 finance chiefs meeting, Sitharaman engaged in discussions with US Treasury Secretary,Janet Yellen. Their talks revolved around bolstering multilateral development banks, addressing global debt vulnerabilities, and addressing matters concerning crypto assets.
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