IMF: India is on the Frontline for Digital Currencies -- Particularly How It Handles Crypto Risks

IMF Chief Comments on Indian Crypto Policy

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

Answering a question on "What role India can play in improving global economic conditions so as to protect the interests of the most fragile," the IMF chief stated that "India already plays an extremely important international role."

It is also a country that is at the forefront of digital currencies, particularly central bank digital currency, and how it manages a reduction in risk from crypto assets to the Indian people and businesses.

Monday's meeting between the IMF boss and Nirmala Sitharaman, Indian Finance Minister, was a success. Crypto regulation was one of their topics.

As the government is deciding how to handle crypto assets, officials from India's Ministry of Finance were consulting with IMF and World Bank.

On April 1, the Indian government began taxing cryptocurrency income at 30%, without allowing loss offsets and deductions. The volume of crypto trading fell at all the Indian exchanges. Soon, a further 1 percent tax will be deducted at source.

Indian Finance Minister discusses Crypto at the IMF Meeting

At the IMF meeting last Wednesday, the Indian finance minister expressed concern about cryptocurrency risks. She stated that the "biggest risk to all countries will be the money laundering and the possibility of currency being used to finance terror."

Sitharaman stressed that regulation was key.

Technology regulation will need to be so proficient that it is not behind the curve but that it is at the top.

Indian finance minister said that it was impossible for any country to do this alone. It's impossible. It doesn't matter if one country believes it can. She stressed that it must be universal."

Tobias Adrian (Financial Counselor and Director, IMF Monetary and Capital Markets Department), stated last Wednesday that India's "Regulating Crypto Assets is definitely high on the agenda".

The Reserve Bank of India (RBI) is currently working on a digital currency. This was announced by the Finance Minister . It will be launched this financial year. T. Rabi Sankar, RBI Deputy Governor, stated earlier this month that the central bank would launch a digital currency in a carefully calibrated and graduated way, assessing the impact along the way.

"The digital rupee, which will be the digital version of our physical rupee, will be regulated and regulated by RBI," Indian Prime Minister NarendraModi explained . Modi stated that the digital rupee would revolutionize fintech.