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Global consensus is necessary for cryptocurrency regulations to be effective: FM Nirmala Sitharaman

Global consensus is necessary for cryptocurrency regulations to be effective: FM Nirmala Sitharaman

A global template may need to be created, and everyone will have to work together on it, Union Finance Minister Nirmala Sitharaman said on April 23. She stressed that this is necessary before India takes any action regarding crypto regulation. Otherwise, regulating it will not be effective.

Although “distributed ledger technology” has merit and promise, the minister insisted that this does not mean that it should be controlled.

“The IMF recently released a research on cryptocurrencies and how they may affect the macroeconomic stability of the G-20, of which India is currently the Presidency. India came up with the idea, and it was adopted. I’m delighted the G-20 has kept it on its agenda for this year. The G-20-established Financial Stability Board (FSB) has agreed to provide a report that will also emphasise financial stability, Ms. Sitharaman added.

She said, “In July, when Finance Ministers and Central Bank Governors meet under the G-20, their (FSB’s) report and the IMF’s report will be discussed. There will be a summit of the prime ministers and presidents of the G-20 countries convened in India in September after that.

During the conversation with “Thinkers Forum, Karnataka,” the Minister was responding to a query regarding the regulation of digital currency or cryptocurrencies.

On February 24 and 25, Bengaluru hosted the first G-20 Finance Ministers and Central Bank Governors (FMCBG) meeting under the Indian Presidency.

The underlying principle, according to Ms. Sitharaman, is that because digital currencies are entirely digital and technology-driven, action can only be taken with the support of all countries because the technology is widely dispersed and identity can sometimes be difficult to establish.

“Technology knows no borders and may simply pass over, therefore no one nation can successfully manage a technology-driven crypto asset on its own. As a result of its dependence on technology, she asserted, all nations must be on board for it to be successful.

The Minister further stated that “all of us will have to work together on it, otherwise regulating crypto may not be effective,” noting that the G-20, along with the OECD (Organisation for Economic Co-operation and Development), and other organisations like the IMF, World Bank, and so on, are of the opinion that a global template may need to be created.

However, this does not imply that we are in charge of distributed ledger technology, as it has virtues, possibilities, and strengths of its own. We remember that,” she continued.

Ms. Sitharaman emphasised that inflation in India today is mostly “imported” due to the price of fuel and fertilisers and noted that the world community is now watching India for how it handled the epidemic, Russia-Ukraine war, and its repercussions on its own.

“So, you’re bringing it all in, even though your own cause of inflation may be supply-side; every government in India battles inflation, as you are aware. She added that amid all of this, Prime Minister Narendra Modi has made sure that the Indian people wouldn’t suffer. “But today, the pressure on inflation in India are largely because of the imported price hikes,” she said.

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