India Is on the Frontline of Digital Currencies, Especially How It
Handles Crypto Risks: IMF
International
Monetary Fund (IMF) Managing Director Kristalina Georgieva says India is
"a country that is on the frontline of digital currencies,"
especially how it handles a reduction of risk from crypto assets for the Indian
people and businesses. She met with Indian Finance Minister Nirmala Sitharaman
to discuss crypto regulation.
IMF’s Chief Comments on Indian Crypto Policy
At an IMF press
conference on Wednesday, Managing Director Kristalina Georgieva commended the
Indian government’s approach to cryptocurrency.
Responding to
a question about "what role India can play in improving the global
economic situation so as to safeguard the interests of the most vulnerable,"
the IMF chief said, "India already plays a very important international
role." She elaborated:
"And it is a
country on the cutting edge of digital currencies, particularly central bank
digital currencies, and how they manage the risk reduction from crypto assets
for the Indian people and businesses."
The IMF boss
met with Indian Finance Minister Nirmala Sitharaman on Monday, and crypto
regulation was among the topics they discussed. Officials from India’s Ministry
of Finance have reportedly been consulting with the IMF and the World Bank on
crypto policies as the government works on how to treat crypto assets.
The Indian
government started taxing cryptocurrency income at 30% without allowing loss
offsets or deductions on April 1. Crypto trading volumes subsequently plunged
at exchanges across the country. A further 1% tax deducted at source (TDS) will
be effective from July 1.
The Indian Finance Minister Discusses Crypto at the IMF Meeting
The Indian
finance minister raised concerns about the risks of cryptocurrencies at the IMF
meeting last week. "I think the biggest risk for all countries across the
board will be the money laundering aspect and the aspect of currency being used
for financing terror," she said.
Emphasising
that regulation is key, Sitharaman said:
"Regulation
using technology will have to be so adept that it will not be behind the curve,
but be sure that it is on top."
The Indian
finance minister added that it is not possible for one country to do it alone.
"That’s not possible. If any country thinks that it can handle it. It
has to be across the board, " she stressed.
Tobias
Adrian, Financial Counselor and Director of the IMF Monetary and Capital
Markets Department, said last week that "Regulating crypto assets is
certainly high on the agenda" for India.
Meanwhile,
India’s central bank, the Reserve Bank of India (RBI), is working on a digital
rupee, which the finance minister said will be introduced this financial year.
Earlier this month, RBI Deputy Governor T. Rabi Sankar said the central bank
would go about launching a digital currency "in a much calibrated,
graduated manner, assessing impact all along the line."
Indian Prime Minister Narendra Modi previously explained: "The digital rupee will be the digital form of our physical rupee and will be regulated by the RBI." "The digital rupee will revolutionise the fintech sector," Modi noted.
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