Nirmala Sitharaman roots for global crypto regulation
Finance minister Nirmala Sitharaman on Tuesday made a strong case for regulating crypto currencies at a global level to mitigate the risk of money laundering and terror funding.
Participating at a high-level panel discussion organised by the IMF, the finance minister said as long as the non-governmental activity of the crypto assets was through unhosted wallets, the regulation was going to be very difficult.
However, she said, cross border payments between countries will become very effective through central bank-driven digital currencies.
“The risk which worries me more on the non-governmental domain is essentially you are looking at unhosted wallets across the borders, across the globe...
“So, regulation cannot be done by a single country within its terrain through some effective method and for doing it across the borders, technology doesn’t have a solution which will be acceptable to various sovereigns at the same time and be applicable within each of the territory,” she said.
The risks involved will have to be differentially approached, because for each user case, the risks can also be different, depending on the economy, she said during a panel discussion on ‘Money at a Crossroad: Public or Private Digital Money?’
Citing an example, Sitharaman said application of regulation and risk involved for Nigeria would be different from a tourism or investment rich Bahamas.
Stressing that regulation using technology will have to be so adept and nimble that it should not be behind the curve. It has to be ahead and this is not possible if any one country thinks that it can handle it, she said.
Pointing out that unless there is a global approach to regulating and understanding the technology of crypto currencies there is a risk of money laundering.
“I harp on that because I think the biggest risk for all countries across the board will be on the money laundering aspect, and also on the aspect of currency being used to finance terror,” she said.
Finance minister Nirmala Sitharaman on Tuesday discussed a range of issues, including the current geopolitical situation and its economic impact, with IMF chief Kristalina Georgieva, and highlighted the Indian government’s commitment to support growth through capital expenditure.