International Monetary Fund (IMF) Managing Director Kristalina Georgieva says India is “a country at the forefront of digital currencies,” particularly “as it does with de-risking crypto assets for Indian people and businesses bypasses”. She met with Indian Finance Minister Nirmala Sitharaman to discuss crypto regulation.

The head of the IMF comments on the Indian crypto policy

IMF Managing Director Kristalina Georgieva praised the Indian government’s approach to cryptocurrency at an IMF press conference on Wednesday.

When asked “what role India can play in improving the global economy to protect the interests of the most vulnerable,” the IMF chief replied, “India is already playing a very important international role.” She said:

And it is a country that is at the forefront of digital currencies, particularly central bank digital currencies and how it deals with de-risking crypto assets for Indian people and businesses.

The IMF chief met with Indian Finance Minister Nirmala Sitharaman on Monday and crypto regulation was among the topics they discussed.

Indian Treasury officials have reportedly been in consultation with the IMF and World Bank on crypto policy as the government works on how crypto assets should be treated.

The Indian government began taxing cryptocurrency income at 30% on April 1, with no allowance for loss compensation or deductions. Crypto trading volume then plummeted on exchanges across the country. Another withholding tax of 1% (TDS) will come into force shortly.

Indian finance minister discusses crypto at IMF meeting

India’s finance minister raised concerns about the risks of cryptocurrencies at last week’s IMF meeting. “I think the biggest risk for all countries will be the money laundering aspect and the aspect of using currencies to fund terrorism,” she said.

Stressing that regulation is key, Sitharaman stated:

Regulation using technology must be so adept that it does not lag behind the curve but must be confident that it is ahead.

The Indian finance minister added that it is not possible for any country to do this alone. “It’s not possible. If any country thinks it can handle it. It has to be nationwide,” she stressed.

Tobias Adrian, financial adviser and director of the IMF’s monetary and capital markets department, said last week that “crypto asset regulation is high on the agenda” for India.

Meanwhile, India’s central bank, the Reserve Bank of India (RBI), is working on a digital rupee, which the finance minister said will be launched this fiscal year. Earlier this month, RBI Deputy Governor T. Rabi Sankar said the central bank would roll out a digital currency “in a very calibrated, phased manner and assess the impact across the board.”

“The digital rupee will be the digital form of our physical rupee and will be regulated by the RBI,” Indian Prime Minister Narendra Modi previously stated. “The digital rupee will revolutionize the fintech sector,” Modi noted.

What do you think of the IMF chief’s comments on how India is dealing with crypto? Let us know in the comment section below.

Kevin Helms

As an Austrian economics student, Kevin discovered Bitcoin in 2011 and has been an evangelist ever since. His interests lie in Bitcoin security, open source systems, network effects and the interface between economics and cryptography.

photo credit: Shutterstock, Pixabay, WikiCommons

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