Indian Finance Minister Calls for Global Consensus on Crypto Regulation

Indian Finance Minister Nirmala Sitharaman emphasized the necessity of international cooperation for cryptocurrency regulation. In an interview with Businessline published Monday, she highlighted the need for a unified global approach, particularly within the G20, to tackle the challenges posed by cryptocurrencies.

Sitharaman underscored that the topic of cryptocurrency regulation has been on the Finance Ministry’s agenda since 2020. “Even before G20 and since 2020, we had discussions about it in the Finance Ministry,” she noted. The Reserve Bank of India (RBI) also has its stance on the matter. She reiterated, “We are very clear that there should be global understanding on how to regulate crypto.”

The Finance Ministry has been collaborating with international bodies like the International Monetary Fund (IMF) and the Financial Stability Board (FSB) on crypto regulation. Sitharaman stressed that unilateral regulation would be ineffective due to the borderless nature of cryptocurrencies. “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,” she explained. “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 it intends to.”

Domestic Views and Future Framework

When questioned about differing opinions among Indian regulators, Sitharaman dismissed the notion of confusion. “These are opinions, no harm in that,” she stated. “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. SEBI advocated for different regulators to oversee various facets of cryptocurrency trading. Concurrently, the Reserve Bank of India submitted its concerns, highlighting the macroeconomic risks and issues related to tax evasion and fiscal stability.

India currently lacks a dedicated regulatory framework for cryptocurrencies. A draft bill to regulate digital assets was created in 2021 but has not been introduced yet. The Financial Intelligence Unit – India (FIU-IND) monitors 47 cryptocurrency-related entities and recently authorized crypto exchanges Binance and Kucoin as virtual asset service providers. In March, Sitharaman expressed her expectation that a regulatory framework for cryptocurrencies would emerge through G20 discussions.