Indian Finance Minister Nirmala Sitharaman has reiterated her desire to see digital currencies and their underlying blockchain technology globally regulated under a common standard.
In an interactive session with industry stakeholders, Sitharaman noted that the global digital asset regulation plan does not mean that authorities control the industry.
She clarified that the purpose of an international regime is to protect millions of investors and reduce the activities of industry bad actors.
“All of us will have to work together on it otherwise regulating crypto may not be effective. That does not mean we are controlling the distributed ledger technology,” said Sitharaman. “It has its goodness, it has its potential, it has its own strengths. We keep that in mind.”
As President of the G20, India has indicated that creating a global framework for digital assets is top of its agenda. Since the announcement, there has been speculation that digital currency regulation could be draconian, given the country’s treatment of its local industry.
India’s relationship with digital assets can be described as frosty, underscored by whispers of a blanket ban and a shrinking Web 3 talent pool. Things took a wild turn after the government imposed a 30% tax on digital assets plus a 1% tax deducted at source.
Furthermore, Indian investors are not allowed to offset losses against gains, and all efforts by a coalition of stakeholders to influence the government to reduce its policing of the industry have been abandoned.
Plans to create a global regulatory framework for the rest of the G20 nations are underway, with the coalition’s central bank governors and finance ministers meeting in India to explore draft legislation. Another meeting has been scheduled in July with the group keen to explore the reports from the International Monetary Fund (IMF) and the Financial Stability Board (FSB).
“So if you were to regulate here and not elsewhere, it will only flow like that and keep hitting back at you,” said Sitharaman. “It will not be effective.”
India’s unwavering belief in blockchain
Sitharaman disclosed that India’s government believes that blockchain adoption in the country could reach 46% before 2026, saying that the government is aware of its myriad of benefits to the local economy.
As part of efforts to trigger adoption, the National Institution for Transforming India (NITI) Aayog recently launched a blockchain module for citizens in partnership with technology giants 5ire and Network Capital to deepen the talent pool.
Several Indian universities have begun offering blockchain courses in partnership with the advocacy groups like the India Blockchain Alliance, while municipal governments are adopting the technology to streamline their processes.
Watch: Bangalore and blockchain—the synergy is there
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