Finance Minister Nirmala Sitharaman Friday said technology does not respect physical borders and that there is a need for global action in developing regulations for technology-driven payment systems including cryptocurrencies.
“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 that whether it is your cryptocurrency, tech-driven payment systems, data privacy, whether it is ensuring that data is used ethically,” Sitharaman said, adding that there is need for global collective action in these areas. Sitharaman was speaking virtually at the InFinity Forum 2021, organised by the International Financial Services Centres Authority, in partnership with GIFT City and Bloomberg.
The Union government intends to bring a Bill to prohibit “all private cryptocurrencies in India” with “certain exceptions”. The Cryptocurrency and Regulation of Official Digital Currency Bill, 2021, is listed for introduction in Lok Sabha in the ongoing Winter Session.
The Bill seeks to “create a facilitative framework for the creation of the official digital currency to be issued by the Reserve Bank of India”. It 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”.
In response to a query on how regulations can keep pace with evolving technology, Sitharaman said regulation — legislative as well as executive — have so far only been catching up with technology. “So as long the executive and legislature are only catching up, you will never be on top of it. And with technology, I am not sure they (regulators) can ever be on top of this kind of situation, because it is ever changing and ever evolving,” she said.
Technological revolution helped India in achieving financial inclusion at a rapid pace, as India has 1.29 billion Aadhaar cards, which are quick to respond to any KYC related questions, she said. There is no need for brick and mortar branches now just to service bank customers, the finance minister said, adding that customers can get banking services without any hitch and India has seen digital financial inclusion.