India to look for consensus solutions to virtual assets during G-20 presidency, says CEA Nageswaran

Dr V Anantha Nageswaran, Chief Economic Adviser of India (File photo)

India will look to find a “consensus-based solution” to the challenge of virtual assets during its presidency of the G-20, Chief Economic Advisor V Anantha Nageswaran said on November 1.

Speaking at Indian Council for Research on International Economic Relations’ 14th annual international G-20 conference, the government’s top economist said finding this solution would be one of the objectives of India’s G-20 presidency and would help tackle “the scale and scope of the response of the global community to many transboundary challenges such as regulation of virtual assets”.

India’s focus would also be on dealing with cross-border remittances and the issue of global capital flows and the creation of buffers and safety nets for developing countries that are affected by the policy spillovers of developed countries.

India will be handed over the presidency of the G-20 in December from Indonesia.

This is not the first time that India has called for a global response to cross-border threats like virtual digital assets, a term which was introduced in the 2022 budget to tax crypto transactions.

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Most recently, in July, Finance Minister Nirmala Sitharaman had said the Reserve Bank of India (RBI) wanted the government to frame regulations such that private cryptocurrencies would be banned. However, Sitharaman said the government was of the opinion that a "global collaboration" is needed for any effective regulation or ban, the finance minister had told the Parliament.

Speculation has been rife for months now that the government could introduce legislation to regulate the crypto sector. However, no such bill has been introduced so far. Further, the government’s consultation paper on crypto, which was expected to outline the government's stance on the matter, is also awaited.

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While the government has refused to make public its stance on crypto so far, the RBI today launched its pilot project for its wholesale Central Bank Digital Currency. The central bank hopes to launch the pilot for the retail CBDC) “within a month”, it said in a statement on October 31.

The RBI has argued that CBDCs could "kill" the reasons for the existence of private cryptocurrencies.