Finance Minister Nirmala Sitharaman on Tuesday raised doubts about the size of the cryptocurrency market worldwide and stressed the need for a regulatory mechanism acceptable to all countries to prevent its use to launder money and fund terrorism, which, she said, were big concerns for India.
"I think the biggest risk for all countries across the board will be on the money laundering aspect and also on the aspect of currency being used for financing terror," Sitharaman said at a seminar hosted by the International Monetary Fund (IMF).
The Finance Minister is in Washington DC for the Spring Meetings of the World Bank group.
The minister pitched the need for a common international approach on regulating the sector, in addition to all the changes that have taken place in the last few years. "Unless there's going to be a global approach at regulating and also an understanding of the technology even as it keeps evolving, to be on the top of things, and to have technology driven solutions to regulate and monitor. Not so much to interfere, but, of course to keep an eye on money laundering."
The minister had earlier at the seminar raised doubts about the size of the cryptocurrency market. "We are not sure about the veracity of the data, which says the volume is this much or that much. Those numbers are questionable."
India distinguishes between cryptocurrency and crypto assets as a result, and the minister had in February announced a 30 per cent tax on income from these transactions, which includes a 1 per cent deduction at source. "We were trying to make sure that we are keeping a trail and also making sure these are going to be eventually compliant with anti-money laundering rules. Additionally, we are making sure that these kind of operations don't end up inadvertently to funding any kind of terror activities."
Sitharaman had used the seminar to detail India's growing e-economy and plans on entering the cryptocurrency market with its own currency sometime during the year.
