India’s finance minister Nirmala Sitharaman has indicated the nation will uses its looming presidency of the G20 group of nations to push for multilateral regulation of cryptocurrency.
Speaking during a visit to the US this week, Sitharaman said India hopes to lead an assessment of work on digital money already undertaken by other G20 members, the World Bank and the International Monetary Fund, and then develop a regulatory framework to control use of cryptocurrencies and other digital assets.
Sitharaman said multilateral regulation is desirable because she and other G20 members are aware of cryptocurrency being used to launder money and facilitate the global trade in illicit drugs. In APAC alone, South Korea, Japan and Singapore have this year discussed or introduced regulations to curb money laundering practices involving cryptocurrency.
The finance minister took care not to demonise blockchain – the tech that underpins cryptocurrency.
“Implicit in this is that we don’t want the technology to be disturbed – we want the technology to survive and for the fintech and other sectors to benefit from it,” she said.
But she added that countries need to be able to understand money trails because crypto-adjacent money laundering has become “substantial.”
“There is an understanding that we need to have some kind of a regulation and that all the countries will have to do it together. No one country is going to be able to singularly handle it.”
The G20 group changes presidency each year and the nation chosen to host its summit typically tries to champion issues that are both global priorities and locally relevant. Indonesia, the current G20 president, has made digital transformation one of the themes of its year, alongside improving global health architecture and managing the transition to clean energy.
Indonesia’s foreign affairs minister, Retno L.P. Marsudi, has called for the G20 to build a secure digital ecosystem across the bloc to protect the economy and individuals, plus efforts to reduce the digital divide such as improved cooperation to improve digital literacy.
Those goals will likely be reflected in initiatives announced at the G20 summit next month.
India takes over the presidency from December 1. As of September the nation’s Ministry of External Affairs stated that its priorities are being “firmed up.”
India’s current response to cryptocurrencies is to tax trading in them heavily while also seeking to stamp out illicit uses and discourage their use for payments. The nation’s reserve bank has also called [PDF] for a phased introduction of two central bank digital currencies – one for retail use and the other as a wholesale instrument. Pilots will soon commence for the currencies, but no timeframe for their introduction has been discussed.
Ironically, one of the things the reserve bank worries about with a digital rupee is that it has the potential to exclude the nation’s large rural population – exactly the problem Indonesia is trying to address while it holds the G20 presidency. ®