According to Kristalina Georgieva, Managing Director of the International Monetary Fund (IMF), India is “a country on the forefront of digital currencies,” particularly in terms of “how it handles a reduction of risk from crypto assets for the Indian people and businesses.” She met with Nirmala Sitharaman, India’s finance minister, to discuss crypto regulation.
IMF Managing Director Kristalina Georgieva commended the Indian government’s approach to cryptocurrency at an IMF press conference Wednesday.
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 that is on the frontline of digital currencies, especially central bank digital currency and how it handles a reduction of risk from crypto assets for the Indian people and businesses.
The IMF boss met with Indian Finance Minister Nirmala Sitharaman Monday, and crypto regulation was among the topics they discussed.
Officials of 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 soon go into effect.
Indian Finance Minister Discusses Crypto at 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 described.
Emphasizing that regulation is key, Sitharaman detailed:
Regulation using technology will have to be so adept that it has to be not 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 one 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 very calibrated, graduated manner, assessing impact all along the line.”
“The digital rupee will be the digital form of our physical rupee and will be regulated by the RBI,” Indian Prime Minister Narendra Modi previously explained. “The digital rupee will revolutionize the fintech sector,” Modi noted.