Crypto could be used to launder money, finance terror: Sitharaman

Finance Minister Nirmala Sitharaman has called for tighter regulation of cryptocurrency, saying digital currency could be used to launder money and finance terrorism.

Addressing a seminar at the spring meeting of the International Monetary Fund (IMF), Sitharaman said: “I think the biggest risk for all countries across the board will be the money laundering aspect and also the aspect of currency being used for financing terror.”

“I think regulation using technology is the only answer. Regulation using technology will have to be so adept, that it has to be not behind the curve, but be sure that it is on the top of it. And that’s not possible. If any one country thinks that it can handle it. It has to be across the board,” she said.

The minister reached Washington, DC, on Monday morning on an official visit to attend the spring meetings at the World Bank, the G20 finance ministers’ meeting and the Central Bank Governor Meeting (FMCBG).

During the first day of the visit, she participated in a high-level panel discussion on ‘Money at a Crossroad’ hosted by Kristalina Georgieva, managing director, IMF.

“We are at the crossroads around how fast, how far, and in what proportion, but I see this as a one way street in which digital money is going to play a bigger role,” the IMF chief said in her opening remarks.

Sitharaman highlighted India’s performance in the digital world and the government’s efforts to build the digital infrastructure framework over the last decade, stressing the increase of the digital adoption rate in India during the COVID-19 pandemic.

“If I use 2019 data, the digital adoption rate in India is about 85 per cent. But globally that same year it was only somewhere near 64 per cent. So the pandemic time actually helped us to test and prove for ourselves that it is simple to use, common people can use it, and adoption actually was proven,” Sitharaman claimed.

Apart from her official engagements with the World Bank, IMF, G20, and Financial Action Task Force, Sitharaman on Monday also attended an event at the Atlantic Council, a think tank based in Washington, DC.