sitharaman: IMF to expand work on crypto as finance minister Nirmala Sitharaman flags threats

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NEW DELHI: The Inter­na­tion­al Mon­e­tary Fund on Tues­day vowed to expand its work on cryp­to assets, amid a call from finance min­is­ter Nir­mala Sithara­man to evolve a con­sen­sus to deal with dig­i­tal assets.
Dur­ing a pan­el dis­cus­sion ear­ly Tues­day morn­ing (India time), Sithara­man flagged con­cerns over pos­si­ble mis­use of pri­vate dig­i­tal cur­ren­cies for mon­ey laun­der­ing and ter­ror financ­ing and reit­er­at­ed the government’s stand that one coun­try alone can­not reg­u­late the use of the rapid­ly ris­ing instru­ment. Besides, she said that the tech­nol­o­gy to deal with cryp­to assets needs to con­tin­u­ous­ly evolve.
“Reg­u­la­tion using tech­nol­o­gy is the only answer. It will have to be so adept, that it is not behind the curve, but be sure that it is on the top of it. And that’s not pos­si­ble if any one coun­try thinks that it can han­dle it. It has to be across the board,” the FM said. 

Indi­an author­i­ties are work­ing on a leg­is­la­tion on cryp­to assets but are unclear if a full-fledged ban, as was advo­cat­ed by an expert pan­el as well as the Reserve Bank of India, will work unless oth­er coun­tries are also on board. For the time being, the gov­ern­ment has imposed a tax on cryp­to trans­ac­tions, includ­ing a 1% tax deduc­tion at source, which Sithara­man said was essen­tial for estab­lish­ing a mon­ey trail.
She also said that the evo­lu­tion of tech­nol­o­gy and schemes — from Aad­haar to Jan Dhan — had prompt­ed her to announce the Cen­tral Bank Dig­i­tal Cur­ren­cy (CBDC) in the Bud­get, which is expect­ed to be rolled out by the RBI dur­ing the cur­rent finan­cial year.
While acknowl­edg­ing some of the con­cerns, IMF man­ag­ing direc­tor Kristali­na Georgie­va said that the mul­ti­lat­er­al agency will expand its work on dig­i­tal mon­ey with a spe­cial focus on inter­op­er­abil­i­ty of CBDC, reg­u­la­tion of pri­vate dig­i­tal cur­ren­cies and risks from cyber­at­tacks. Although she was upbeat about CBDC, the IMF chief appeared wor­ried over pri­vate dig­i­tal cur­ren­cies pos­ing a threat to the cur­ren­cy sov­er­eign­ty of small­er economies.
Her com­ments came amid back­ing from the Sin­ga­pore and Brazil­ian cen­tral banks on CBDC mak­ing inter­na­tion­al trans­fers smoother and eas­i­er for indi­vid­u­als, even Mon­e­tary Author­i­ty of Sin­ga­pore man­ag­ing direc­tor Ravi Menon said he did not see a “com­pelling case” for retail dig­i­tal cur­ren­cies launched by cen­tral banks.
Watch Mon­ey laun­der­ing, ter­ror financ­ing biggest con­cerns around cryp­tocur­ren­cy, says Nir­mala Sitharaman



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