Finance Minister Nirmala Sitharaman calls for global crypto regulations

Nirmala Sitharaman

Finance Minister Nirmala Sitharaman called for global crypto regulations at a seminar in the ongoing Spring Meet of the International Monetary Fund [IMF] in Washington DC on Monday. She also discussed her concerns over the misuse of cryptocurrencies for terror financing and money laundering activities and said, “I think the biggest risk for all countries across the board is money laundering aspect and also on the aspect of currency being used for financing terror.”

She further said in her address that India acknowledges that innovation is disruptive but has concerns over the associated risks of cryptocurrencies and unhosted wallets. She insisted that these unhosted wallets facilitate illicit activities via cross-border transactions of cryptocurrencies and assets not approved by a bank or financial institution. She called for the world leaders to lend their support and cooperation to develop a comprehensive crypto regulatory framework for mitigating these risks.

While speaking at the IMF and World Bank panel discussion on the theme ‘Money at the Crossroad: Public or Private Digital Money’, Sitharaman reiterated that only a robust global regulatory framework was the key to addressing these concerns. She said, “Regulating cannot be done by a single country within its terrain through some effective method. And for doing it across borders, technology does not have a solution which will be acceptable to various sovereigns and, at the same time, is applicable within each of the territories.”

She stressed the need for regulations on the global scale and said, “I think regulation using technology is the only answer. Regulation using technology will have to be so adept that it has to be not behind the curve, but be sure that it is on the top of it. And that’s not possible. If any one country thinks that it can handle it. It has to be across the board.”

She further continued that a global approach to regulations and understanding of the technology is necessary as the tech solutions keep evolving. There is a need for "not so much to interfere, but to keep an eye" on them. This ‘keeping an eye’ needs to be region-specific and "differentially approached because, for each user case, the risks can also be different depending on the economy you are talking about."