India Working with G20 Nations to Develop SOP on Crypto Regulation
India is working with other G20 nations on developing a collective standard operating procedure (SOP) to regulate crypto assets, said the Union Finance Minister of India, Nirmala Sitharaman. She also called for "a globally coordinated approach on the regulation of crypto assets" during her recent meeting with the International Monetary Fund (IMF) Managing Director, Kristalina Georgieva.
Discussion on Crypto Regulation at the G20
The Union Finance Minister of India, Nirmala Sitharaman, replied
to several questions about crypto mining and regulation on Monday in Lok
Sabha, the lower house of Parliament. Sitharaman explained:
"Whether it's mining, the asset, or the transaction, we
recognize that it is almost entirely driven by technology, and a single
country's effort to control or regulate it will be ineffective." She
added:
"There is an evolving consensus, and that’s why in the G20,
we are raising the issue for detailed discussions with the members so that a
standard operating protocol (SOP) emerges after the discussions."
The Group of Twenty (G20) comprises Argentina, Australia,
Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, South
Korea, Mexico, Russia, Saudi Arabia, South Africa, Turkey, the UK, the US, and
the European Union. The G20 members represent around 85% of the global GDP,
over 75% of the global trade, and about two-thirds of the world population.
The union finance minister further told parliament that the discussions with other G20
members aim
to have "a coherent, comprehensive approach where all countries work
together on regulation, including mining, trading, and transacting, and
therefore all this is being looked at comprehensively." She emphasized:
"We are working together to get a collective SOP on
it."
Sitharaman told reporters on Saturday that the issue of
regulating crypto assets will be taken up at the G20 meeting under India’s
presidency.
A Globally Coordinated Approach to Crypto Regulation
"Crypto is heavily tech-led and requires less human
intervention," the Indian finance minister was quoted by PTI as saying.
"We are talking to all nations because if a regulation has to be framed,
one country cannot frame it alone, so we are talking to all to form a standard
operating procedure so that it is effective, and the G20 process of discussion
is underway."
Sitharaman’s statements followed her virtual meeting with
International Monetary Fund (IMF) Managing Director Kristalina Georgieva on
Thursday, where she discussed the role of the IMF and other relevant
international organizations "to develop a globally coordinated approach on
the regulation of crypto assets," the Indian Finance Ministry tweeted on
Twitter. The Economic Affairs Secretary, Ajay Seth, said earlier this month
that the government of India plans to introduce measures
around crypto this year.
At the G20 Finance Ministers and Central Bank Governors meeting
last October, the union finance minister "called for an effective tax
reporting regime and information exchange between jurisdictions for crypto
assets to combat offshore tax evasion."
While India does not have a regulatory framework for crypto, the
government is taxing crypto income at 30% and has imposed a 1% tax deducted at
source (TDS) on crypto transactions.
Earlier this month, Sitharaman presented the Economic Survey
Report 2022–23 before the parliament, highlighting the need for "a global approach to regulating the crypto ecosystem." The Finance Bill also
introduced new crypto tax penalties, including jail time for non-payment of crypto TDS.
The
Reserve Bank of India (RBI), has continued to recommend a complete ban on
crypto assets, including bitcoin and ether. RBI Governor Shaktikanta Das has
warned that cryptocurrencies are a risk to the country’s financial system and
will cause the next financial crisis if they are not banned.
What is your take on the collective standard operating procedure
(SOP) to regulate crypto assets? Please post your comments.
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