MUMBAI: Finance Minister Nirmala Sitharaman underscored the imperative of global cooperation and the establishment of a comprehensive framework as essential measures to effectively mitigate threats arising from the realm of cryptocurrencies. Speaking at the Global Fintech Fest in Mumbai, Sitharaman emphasized that, despite efforts to fortify security defenses, emerging attack vectors continue to pose challenges. She characterized cryptocurrencies as both a threat and an opportunity.
Cryptocurrency issues have long been contentious in India, with Reserve Bank of India (RBI) Governor Shaktikanta Das expressing recurrent concerns about the potential risks they pose to financial stability. In March, the finance ministry extended regulatory oversight, encompassing the exchange, transfer, safekeeping, and administration of cryptocurrencies, under the Prevention of Money Laundering Act (PMLA).
Sitharaman disclosed that India, during its presidency of the G20, has advanced discussions concerning the regulation and comprehension of crypto asset-related issues. Active deliberations are ongoing, featuring comprehensive contributions from institutions such as the International Monetary Fund (IMF), Financial Stability Board (FSB), and Organisation for Economic Co-operation and Development (OECD).
Highlighting the significance of global collaboration, Sitharaman noted that the IMF and FSB have released a synthesis paper on cryptocurrencies. She underscored that fostering a responsible financial ecosystem hinges on international cooperation and emphasized the necessity of addressing various threats, including those at physical borders, in cyberspace, and emanating from the crypto sphere.
In her address, Sitharaman advocated that fintech companies make substantial investments in robust security measures, including advanced encryption and other protective mechanisms, to safeguard financial transactions and user data. She asserted that a secure system is indispensable for cultivating trust and nurturing a thriving financial ecosystem. She emphasized India's potential to lead efforts in creating an inclusive, resilient, and sustainable financial environment, highlighting that global cooperation is pivotal in achieving this goal.
Recognizing the interconnected nature of financial technology in an increasingly globalized world, Sitharaman stressed the critical importance of forging cross-border partnerships. She posited that collaborative ventures could unlock access to a vast and diverse customer base, while also expediting market participation and penetration.
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