Finance Minister Nirmala Sitharaman said Friday that technology does not respect physical boundaries and that there is a need for global action to be taken in the development of regulations for technology-driven payment systems, including cryptocurrencies.
“Even if we think on a national level, there should also be a global mechanism through which we constantly monitor the development of technology, so that it is your cryptocurrency, technology-driven payment systems, data protection or ensuring that data is used ethically,” said Sitharaman, adding that global concerted action is needed in these areas. Sitharaman spoke virtually at the InFinity Forum 2021, organized by the International Financial Services Centers Authority in partnership with GIFT City and Bloomberg.
The Union government intends to submit a bill to ban “all private cryptocurrencies in India” with “certain exceptions”. The cryptocurrency and regulation of the official digital currency law, 2021, is listed for the introduction to Lok Sabha in the current winter session.
The bill aims to “provide a facilitating framework for the creation of the official digital currency issued by the Reserve Bank of India”. It “also seeks to ban all private cryptocurrencies in India, but allows certain exceptions to promote the underlying technology of the cryptocurrency and its uses”.
When asked how regulation can keep pace with evolving technology, Sitharaman said that regulation – both the legislature and the executive – has so far only kept pace with technology. “As long as the executive and legislative branches catch up, you will never keep track of things. And with technology, I’m not sure if they (regulators) can ever be in control of this type of situation as it is constantly changing and evolving, “she said.
The technological revolution has helped India achieve financial inclusion quickly as India has 1.29 billion aadhaar cards that provide quick answers to all KYC-related questions, she said. There is now no need for brick and mortar branches just to serve bank customers, the finance minister said, adding that customers can easily access banking services and India has seen digital financial inclusion.
