India’s Inputs Important to Formulate Global Policy on Cryptocurrencies: FM Nirmala Sitharaman

Union Finance Minister Nirmala Sitharaman on Tuesday said various issues surrounding cryptocurrencies were discussed at a key G20 meeting here and India’s inputs will play an important role in formulating a comprehensive global policy for the new-age assets.

She made the comments while addressing the media at the Mahatma Mandir convention centre here in Gujarat after the conclusion of the 3rd meeting of G20 Finance Ministers and Central Bank Governors (FMCBGs) held under India’s presidency of the intergovernmental forum.

“Members welcomed the high-level recommendation of the Financial Stability Board (FSB) on crypto asset activities. Members also discussed the presidency note that India had prepared, and noted it would be an important input towards prioritising areas of work essential for achieving a comprehensive, cohesive and coordinated global policy and regulatory framework. Several members appreciated India for bringing up this issue,” she said.

While the work of preparation of ‘synthesis paper’ is underway, India has submitted a ‘Presidency Note’ to the G20 membership laying down important inputs for a roadmap on crypto assets, said an official release.

The roadmap, to be contained in the synthesis paper, will support a coordinated and comprehensive policy and regulatory framework taking into account the full range of risks related to crypto assets, it said.

“Now that discussions on cryptocurrencies are widening, there is a common view that a global understanding is required for regulating crypto assets and (their) implications on emerging markets and developing economies. There are even small countries which are under the impact of unregulated crypto assets,” said the finance minister when asked about India’s stand on the digital assets.

Asked how cryptos will be regulated under FSB regulations, she said the synthesis report, to be jointly prepared by the International Monetary Fund (IMF) and FSB, is expected to come and then a “discussion will take place on the inputs which we have given in the President’s note. Can’t guess now. We have to wait till the next summit.” Reserve Bank of India (RBI) Governor Shaktikanta Das, who accompanied Sitharaman at the press conference, said early enthusiasm about cryptocurrencies is fading in many countries.

“There was an early enthusiasm among countries about cryptos. But, during the last one year, there were failures of some large crypto exchanges, and investors also lost money. Enthusiasm has gone now. Everyone has realised that there is a huge risk. So there is (currently) a great amount of caution and concern about cryptocurrencies,” said Das.

Sitharaman said all the participating G20 members appreciated India’s efforts in creating and utilising digital public infrastructure (DPI).

“The Indian presidency has brought the digital public infrastructure (DPI) agenda into the G20 discussions. Members acknowledged the transformative role of DPI in rapidly advancing financial inclusion and productivity gains. The Ministers and Governors lauded India’s pioneering efforts in leveraging DPIs to accelerate financial inclusion to the last mile,” said the finance minister.

She said managing global debt vulnerabilities is a significant priority area in 2023 and the Indian presidency tried to voice the concerns of the Global South (a reference to developing countries mostly located in southern hemisphere) during these G20 meetings.

“G20 members have actively deliberated on how to strengthen multilateral coordination to effectively address the deteriorating debt situation and facilitate coordinated debt treatment for debt-distressed countries,” she said.

Asked whether there was any discussion on Russia’s decision to end its participation in the Black Sea grain export deal, the Finance Minister said, “Several members condemned it (Moscow’s move), saying it should not have happened. That should not have been suspended.” Notably, the deal, brokered in July to ease the global food crisis, was aimed at giving a safe passage to the Ukrainian grain blocked due to the ongoing Russia-Ukraine war.

Asked if India saw any progress on China’s stand on debt restructuring, she replied in the affirmative.

“Well, today it appeared encouraging,” maintained Sitharaman.

When asked how optimistic India was about China coming onboard as part of a common debt resolution framework, the FM replied, “I am hopeful”.

Notably, the two-day FMCBG meeting concluded with a G20 Chair Summary & Outcome Document comprising 26 paragraphs and two annexes. The Chair Summary reflects the deliberations held during the meeting and conveys the wide support that the Indian G20 presidency received for various deliverables envisaged for 2023, said a release.

Asked why a Chair Summary, instead of a communique, was issued at the end of the meeting, Sitharaman said the members did not have the mandate to change the “language on the Russia- Ukraine War”, which was there in the statement issued after the G20 summit held last year in Bali, Indonesia.

“The Chair’s statement has been issued (instead of a communique) because we still don’t have a common language on the Russia-Ukraine War. And our position since February has been that we derive the statement from Bali, the leaders’ statement which was arrived at that summit,” she said.

“And Bengaluru statement was a feeder of that one. We don’t have the mandate to change the language given in the Bali summit. So it must be left to the leaders during their summit in September to take a call on that. Before that, we don’t think it is right for us to change it,” she added.

The first meeting of G20 Finance Ministers and Central Bank Governors was held in Bengaluru in February this year.

The G20, or Group of 20, is an intergovernmental forum of the world’s major developed and developing economies. India currently holds its presidency.

The group comprises Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, South Korea, Mexico, Russia, Saudi Arabia, South Africa, Turkiye, the UK, the US, and the European Union (EU).

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