Virtual cash: Nirmala calls for global mechanism to regulate cryptocurrency
Virendra Pandit
New Delhi: Finance Minister Nirmala Sitharaman on Friday called for a global mechanism to regulate new technologies, like cryptocurrencies, as no country has a one-point formula to manage it in a borderless technological world.
Amid a raging debate on how to regulate virtual currencies, she said at an event organized by Infinity forum: “Even as we are thinking at a national level, there should simultaneously be a global mechanism through which we are constantly monitoring the movement of technology. So whether it is your cryptocurrency, whether it is your technology-driven payment system, whether it is data privacy, whether it is ensuring that data itself is used ethically, regulating it will have to be a collective effort.”
The Government of India is set to introduce a bill during the ongoing Winter Session of Parliament, seeking to ban all private cryptocurrencies, but not their underlying technology. This has sparked a debate on whether these digital currencies should be regulated or banned. Also, the Reserve Bank of India (RBI) is planning to launch a digital currency.
“All of us also recognize technology respects no physical border. Technology has the power to sweep through borders. It means global action is the only way in which you can regulate it effectively,” she said.
The FM said technology is developing continuously, and there is no clear, pointed answer for regulating it.
“The regulations, both executive and legislative, at least till now, have only been catching up with technology. So long as the executive and legislature are only catching up, you will never be on the top of it. With technology, I am not sure they can ever be on-the-top- of-it-kind of situation because it is ever-changing, and it is ever-evolving.”
She highlighted that the regulatory framework itself will have to grow itself without waiting for the legislative backup for every incremental change in technology.
Indonesia’s Finance Minister Mulyani Indrawati said the recent global agreement on taxing digital technology companies can show a path to govern borderless technology. “This is very critical for countries to work together.”
Sitharaman said the private sector can have its own laws or make its own transactions in areas like cryptocurrency. But it raises the question of the role of the sovereigns.
