Ahead of the 18 th G20 Summit here, Finance Minister Nirmala Sitharaman on Tuesday clubbed crypto assets with drug trade and global tax evasion, and said these posed a threat to the global financial ecosystem.“Crypto is as (much a) threat as an opportunity, and unless there is a global cooperation, we would not be able to have a responsible financial ecosystem and regulate it well,” the minister said, in her address at Global Fintech Fest here.According to her, India’s G-20 presidency India has put on the table issues related to regulating crypto assets and would strive to work out a framework to deal with the relevant issues.“Active discussions are happening and rich content papers from institutions like International Monetary Fund, Financial Stability Board and OECD on crypto are being discussed,” the minister said.These papers are expected to be published shortly.Reserve Bank of India ( RBI ) Governor Shaktikanta Das had said on several occasions earlier that crypto currencies should be completely banned and said transactions via these amounted to gambling.“RBI’s position is that all cryptos should be banned,” he had said, while warning that, “the next financial crisis could occur due to private cryptocurrencies.” However, he had also said the technology of blockchain needed to be supported “as it has other applications as well.”India does not regulate crypto assets though in the past it has made two attempts to bring in legislation to regulate these assets.The RBI imposed a ban on crypto assets in 2018 but the order was set aside by a Supreme Court in 2020.As crypto assets are global in nature and their regulation by a single country may not be effective, the government has been trying to build a common global understanding on handling them.In India frauds relating to crypto are dealt with under laws against fraud and cyber crime and for action in cases of money laundering the agencies under the tax department are used.Sitharaman said India can lead in building a global financial ecosystem that is inclusive, resilient, sustainable.
“We have the tools to make it responsible.There is only one key – global cooperation.”The minister said high remittances received by India – $ 100 billion in 2022 – is a motivating factor for it to pursue enhanced cross border payment mechanisms.“It has been India’s priority in the G-20 also.” The annual volume of cross border payments of $ 20 trillion and costs involved are $ 120 billion.“One of the priority areas for G 20 is information sharing on national experiences and international initiatives on interoperability of national fast payment systems for seamless flow of funds.
Active discussions have happened.This is expected to enhance cross border payments,” she said.The minister said reforms in governance of multilateral development banks, taxation of technology companies that operate across borders and debt distress are some of the other issues on the G-20 agenda.Debt challenge faced by so many countries – including some of the middle income countries – is another threat to the global financial ecosystem, she said.Sitharaman also asked banks and other financial institutions to ensure that their customers must update nominees to help resolve the problem of unclaimed money in future.“I want the banking system, the financial ecosystem including the mutual funds, stock markets to keep in mind that when someone deals with his (customer’s) money, the organisations will have to think about the future and ensure that customers nominate their heirs, give the name and address,” Sitharaman said.According to a report, the banking system alone has more than Rs 35,000 crore of unclaimed deposits, while the overall quantum of the unclaimed money is said to be more than Rs 1 trillion..
