Crypto akin to drugs, intl co-operation needed: FM

Reiterating the government’s majorly hostile stance on cryptocurrencies ahead of 18th G-20 summit in Delhi, FM Nirmal Sitharaman termed cryptocurrencies as equal parts threat and opportunities threat to the global financial ecosystem, that urgently demands international cooperation on developing a regulatory framework for it. 

“In an interconnected world, financial technology transcends borders, therefore making cross-border partnerships absolutely crucial”, she said in her address in the ongoing global fintech fest, Mumbai. During her speech, she called for deliberations on crucial issues like physical border threats, cyber threats, crypto threats, drug menace, tax havens and round-tripping of resources and tax evasions.

Under India’s G-20 presidency, crypto regulation is on the table. According to media reports, active discussions are already happening on the G-20 sidelines, especially on crypto-focused papers published by the IMF, OECD and more. Sitharaman banded drug trade and global trade evasion with cryptos, advocating for fintech companies to invest in developing a robust security and encryption infrastructure. Notably, IMF and FSB have already given their synthesis paper.

“A secured system is what will build trust and therefore that is a must for the financial ecosystem to truly flourish. India can lead in making the financial ecosystem inclusive, resilient and sustainable”, she was reported saying. 

The Reserve Bank of India (RBI) governor Shaktikanta Das has time and again, called for completely banning cryptocurrencies, since they were akin to gambling in his opinion. 

One of the reasons why India is keeping a keen eye on enhancing cross-border transactional structure is because globally, India is the largest receiver of remittances, amassing over $100 billion in 2022. Annually, global cross-border payments are worth $20 trillion. Per media reports, one of the priority focus areas under the Indian G20 presidency is information sharing on national experiences and international initiatives on interoperability of national fast payment systems for seamless flow of funds i.e. facilitating seamless cross-border payments. 

“The high remittances are a motivating factor in our pursuit of enhancing cross-border payment arrangements. Enhancing cross-border payments has been India’s priority, also in the G20 we are talking about it,”