November 2, 2022

India to Prioritize Crypto Regulations Under its G20 Presidency

India to Prioritize Crypto Regulations Under its G20 Presidency

  • With India taking over the G20 presidency from Indonesia for a period of one year, the focus will be on crypto regulations, as expected from statements issued over the last few months by the country’s finance minister.  
  • Nirmala Sitharaman, India’s Finance Minister, has time and again called for global cooperation on crypto regulation, citing the borderless nature of virtual asset transactions.
  • However, FM Sitharaman made it clear that if crypto regulation does take shape, it will be as an asset class and not as a currency.

As expected, Indian Finance minister Nirmala Sitharaman said on Tuesday that the global regulation of cryptocurrencies would be one of the key focus areas during the country's G20 presidency. Her remarks came at the event hosted by the Indian Council for Research on International Economic Relations (ICRIER) at the upcoming G-20 conference. 

The G20 is an intergovernmental group comprised of 19 economies and the EU. Currently, Indonesia holds the presidency of the group. However, India will take over the forum's presidency for one year, starting in December, and will host the G-20 Leaders' Summit for the first time next year.

The G-20 Leaders' Summit will also involve Finance Track which includes meetings among the forum's finance ministers and central bank governors. And in the Finance Track, about 40 meetings are expected to be organized, focusing on areas such as international financial architecture.

Relevant Article: Why IMF Calls for Regulating Crypto?

All Countries Need to be on Board

At the seminar, Sitharaman said India must encourage international groups such as the International Monetary Fund (IMF), Financial Stability Board (FSB), and the Organization for Economic Co-operation to help form cryptocurrency regulations with "all countries" involved.

"No one single country can succeed in individually being in a silo trying to regulate the crypto assets," she said.

She also reasoned why India hasn't set any crypto-specific legislation yet, saying, "we need to have all the members of the G-20 first of all to come on board to see how best it can be done."

Joining her at the same event, V. Anantha Nageswaran, the chief economic adviser to the government, echoed Sitharaman's comments. He said that identifying "consensus-based solutions for accelerating the scale and scope of the response of the global community to many transboundary challenges, such as regulation of virtual assets," would be the third objective of India's G20 presidency.

Relevant Article: OECD Releases a Tax Reporting Framework for Crypto Derivatives, Stablecoins, and NFTs

Crypto Regulation in National Interest

While speaking at the event, Sitharaman clarified that she was talking about crypto as an asset, not a currency.

She further said that regulating crypto as an asset is in the "national interest." Sitharaman pointed out that there is no knowing "what the trail leads you to" while referring to crypto usage. Expanding further on her statement, she added it is not known if crypto is used for drug funding, terror funding, or "just gaming the system."

Sitharaman said that showcasing India's digital revolution will be another priority during this G-20 presidency. This involves the nation's central bank digital currency (CBDC), whose pilot program for the wholesale segment was launched by the Reserve Bank of India (RBI) on November 1st. The digital rupee pilot program involves a three-step graded approach and is expected to be rolled out "with little or no disruption" to the traditional financial system.

Sitharaman also commented on the country "moving speedily forward" with digital financial technology. The people of India have taken to digital technology "as fish to water," she said.


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