On 23rd April, the Finance Minister of India, Nirmala Sitaraman pushed for a need for global consensus on cryptocurrencies. The top finance official of the country asked for a collaborative approach to making regulations more effective.
According to reports, during a series of events held in Bengaluru, India, Sitharaman called for a global consensus that is very crucial to regulate private digital assets. Amidst the widespread outage in the crypto sector across the countries, it’s very important to bring uniformity and international consensus on cryptocurrencies.
In her statement released during the event, she said, “No one country individually, in a matter of technology-driven, crypto assets, can effectively control it, because technology doesn’t have any borders, it can just pass through”. India, currently the president of G20 and made digital assets an agenda for this year. India has been very vocal in advocating collaborative approaches to managing digital assets globally. Additionally, in her statement, she added, “The very character of it being technology driven requires all countries to be on board, or else it will not be effective”. However, the Indian Finance Minister made clear that this didn’t include control over distributed ledger technology (DLT).
According to reports, Indian crypto clients could cross the mark of 150 million by this year. Additionally, if India would cross the 150 million mark this will account for more than half of the world’s crypto holders. There are various reasons for the growth of the crypto user base in India. Firstly, the rise of fintech firms contributed considerably to the growth of the user base in India in recent years. To create and provide clients with cutting-edge goods and services, these businesses are increasingly utilizing blockchain technology. Additionally, the frequent rise in smartphones with cheap internet facilities has further boosted the growth.
However, the Reserve Bank of India’s (RBI) governor Shashikant Das adopted the policy of strict measures towards cryptocurrencies and demanded a harsh ban on private cryptocurrencies. The reason given to him is that unchecked growth could lead to the next financial crisis. Additionally, in 2008, the RBI banned the dealing of cryptocurrencies with banks. However, in March 2020 the highest authority in India, the Supreme Court lifted this ban and re-energized the dead sector of cryptocurrencies.
It will be interesting to see the outcomes from the scheduled summit of G20 under the presidency of India due in September this year. But, this summit comes with an opportunity for India to lead the discussion on the challenges posed by cryptocurrencies and to establish a comprehensive framework for their regulation.