Require global mechanism to regulate crypto: Finance minister Sitharaman
A “global mechanism” is required for effective regulation of evolving technologies and tech-driven products such as cryptocurrencies, digital payments, and data, even as India is in the process of framing laws on these matters, Union finance minister Nirmala Sitharaman said on Friday.
Speaking at the InFinity Forum virtually, the finance minister said technology is ever evolving and respects no physical borders. Hence, “global action” is the only way to effectively regulate technology, she added.
Replying to a specific query on regulating cryptocurrency, Sitharaman said: “So on that question... even as we’re thinking about [it]... at [the] national level, there should simultaneously be a global mechanism through which we are constantly monitoring the movement of technology...”
She said such coordinated global actions are required for several digital innovations such as cryptocurrencies, technology-driven payment systems, and data privacy.
Terming data a revenue stream, the finance minister said its ethical use must be ensured. “But, when you’re looking at data itself as one of the revenue-generating options to regulate, it will have to be a collective effort,” she added.
Sitharaman said that because technology is evolving fast there cannot always be an immediate legislative response “for every incremental change”, and there should be some kind of independence for regulators to address emerging issues.
The finance minister’s comments assume significance in the backdrop of government’s plan to frame a legislation on the matters related to virtual currencies (VCs) and regulation of private cryptocurrencies.
In a written reply to the Rajya Sabha on Tuesday, Sitharaman said, “A Bill on Cryptocurrency and Regulation of Official Digital Currency for introduction in the Lok Sabha has been included in the Lok Sabha Bulletin-Part II as part of Government Business expected to be taken up during the Seventh Session of Seventeenth Lok Sabha, 2021.”
The winter session that started on November 29 will continue till December 23.
The Cryptocurrency and Regulation of Official Digital Currency Bill, 2021 seeks “to create a facilitative framework for creation of the official digital currency to be issued by the Reserve Bank of India (RBI). It also seeks to prohibit all private cryptocurrencies in India; however, it allows for certain exceptions to promote the underlying technology of cryptocurrency and its uses,” according to a bulletin issued by the Lok Sabha.
(A line on InFinity Forum)
Speaking at the fintech conference, Sitharaman said India’s digital policy is inclusive and has empowered the common man. She said 1.29 billion biometric Aadhaar identities are the prime driver in providing direct benefits to the poor. India has 1 billion wireless internet users, 700 million people using internet on phones and 600 million smartphones, she said.
Speaking about the digital revolution, she said brick and mortar bank branches are not necessary to service people , as even “not so smart” phones that the poor have, are now providing them the technological platform to access their banking service without any hitch.
“The technology has helped us achieve what we couldn’t achieve over the decades,” she said referring to the Modi government’s policy drive to empowering the poor through financial inclusion.