India's Finance Minister, Nirmala Sitharaman, announced on Tuesday that the country is working on a global framework to manage issues related to cryptocurrencies and related assets under its G20 Presidency. Sitharaman highlighted the necessity of international cooperation for efficient regulation of cryptocurrencies, acknowledging both the opportunities and threats posed by these digital assets.
During her speech at the Global Fintech Fest 2023, themed 'Global Collaboration for a Responsible Financial Ecosystem: Inclusive, Resilient, and Sustainable', Sitharaman stated that active discussions were ongoing with institutions such as the International Monetary Fund (IMF), Financial Stability Board (FSB), and Organisation for Economic Co-operation and Development (OECD). She emphasized the need for fintech companies to invest heavily in robust security measures to protect financial transactions and user data.
Sitharaman also addressed the Reserve Bank of India's (RBI) concerns about crypto assets. The RBI Governor, Shaktikanta Das, has previously warned that these assets could threaten financial stability and suggested that their exchange, transfer, safekeeping or administration should fall under the Prevention of Money Laundering Act (PMLA).
Beyond crypto regulation, Sitharaman called for international collaboration on tackling tax evasion, easing global debt stress, reforming multilateral development banks, and forming cross-border partnerships. She noted the importance of such collaboration given technology's capacity to transcend borders in an interconnected world.
On the topic of financial inclusion, Sitharaman revealed projections for India's taxable workforce. By 2047, it is expected to rise to 85.3% from its current level of 22.5%, with the share of workforce in total population rising to 45%. She cited recent income tax return data as evidence of widespread formalisation within the Indian economy.
The finance minister also discussed an increase in demat accounts - up to 10 crore in FY23 from 4.1 crore in FY20 - as a sign of the financial revolution reaching even India's smaller towns. Furthermore, she pointed out that the share of mutual fund assets from beyond the top 30 cities has risen from 15% to 26% over the last four years.
Sitharaman also touched upon another G20 priority—cross-border transactions. Global cross-border payments are estimated at $20 trillion with a transaction cost of $120 billion. As India is the largest remittance receiver with $100 billion remittance in FY22, she urged the fintech industry to take a lead role in cross-border payment systems given their success with digital payments.
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