India’s Finance Minister, Nirmala Sitharaman, has urged for a unified approach to regulating cryptocurrencies globally. Sitharaman emphasized that since digital assets are borderless, regulating them would require international collaboration and a universal template. However, she clarified that the aim was not to control distributed ledger technology.
India currently holds the presidency of the G20 and has proposed including cryptocurrency regulation on the agenda, which has been accepted. The International Monetary Fund has also published a paper on the potential impact of private digital assets on macroeconomic stability.
Moreover, Sitharaman stated that India’s proposal had been included in the G20 agenda, and the Financial Stability Board (FSB), set up by G20, would give a report on financial stability. The reports will be discussed in July when Finance Ministers and Central Bank Governors will meet under the G20.
In September, India will also host a summit of Prime Ministers and Presidents of G20 nations, where digital asset regulation will be a key agenda item. By including this issue on the agenda, India is advocating for global cooperation to establish an effective framework for the regulation of cryptocurrencies.
While discussions with G20 members do not include a total ban on cryptocurrencies, Sitharaman has previously called for global action against them. She believes that international collaboration is necessary to prevent regulatory arbitrage, and any law for regulation or prohibition will be effective only after significant international collaboration on assessing the risks and benefits, as well as the evolution of a common taxonomy and standards.
RBI wants a strict approach instead
India’s Finance Minister, Sitharaman’s statement comes amidst the Reserve Bank of India’s maintaining a strict view on cryptocurrencies. The governor of RBI, Shaktikanta Das, has advocated for stringent measures and warned that unchecked growth of private cryptocurrencies could lead to the next financial crisis.
Nirmala Sitharaman’s push for global cooperation points out the need for a unified approach to regulating digital assets. While some countries have already banned cryptocurrencies, India’s approach of seeking collaboration and establishing a common framework for regulation is a step towards creating a level playing field for the industry.
The upcoming G20 meetings and the summit to be hosted by India in September will be crucial in determining the direction of cryptocurrency regulation on a global scale.