Global action needed to regulate evolving tech like cryptocurrencies: Sitharaman

Finance minister Nirmala Sitharaman on Friday said a collective global action is the only way to regulate the constantly evolving technology including the cryptocurrencies, which keep presenting challenges to countries world over.

The finance minister said movement of technology is constant and to have effective regulation that converges with global practices, a wider mechanism is required that brings together international best practices.

Her comments also come against the backdrop of the government preparing to come out with legislation to regulate cryptocurrencies.

"Even as we are thinking about at a national level, there should simultaneously be a global mechanism through which we are constantly monitoring the movement of technology, so that whether it is your cryptocurrency, whether it is tech-driven payment system, data privacy, whether it is ensuring that data is used ethically...

“There needs to be collective effort to monitor movement of technology and devise regulations. With technology driven systems, you will need to be on top of it. Some kind of mechanism of independent regulators can do with technology that is evolving,” Sitharaman said while speaking at the Infinity Forum event organised for deliberations on fintech.

Sitharaman said digital revolution in India has helped expand the scope of financial inclusion and reducing poverty. “Technology has helped us achieve what we did not do in decades earlier. It has helped spread of financial inclusion and taken government schemes to all the beneficiaries.”

It is here, she said, that fintech industry has helped provide the necessary backbone required for achieving the social norms of empowering the poor.

The finance minister said that India has 1.29 billion Aadhar identification numbers, about 1 billion Indians are connected to the net and 700 million through their phones. Also, there are about 600 million smart phone users. So, technology revolution is for real in India, she said, and is helping in achieving he goals of financial inclusion.

India is working on a new Bill on cryptocurrency which will take into account the rapidly changing dimensions in virtual currency space and will be brought in Parliament during the ongoing session, which will end on 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. The Bill 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".

Replying to a question on how regulation keeps pace with technology amid discussion on cryptocurrency in India, she said since these are evolving areas, there is no clear pointed answer.