Money Laundering, Terror Financing Are Major Risks Posed By Cryptocurrency: Nirmala Sitharaman

The finance minister reached Washington on Monday on an official visit to attend the Spring Meetings at the World Bank, the G20 Finance Ministers meeting and the Central Bank Governor Meeting

Nirmala Sitharaman highlighted India’s performance in the digital world and the government’s efforts to build the digital infrastructure framework over the last decade. Image: Getty

New Delhi: Finance Minister Nirmala Sitharaman has recently issued an alert over crptocurrency. She said the biggest risk of cryptocurrency could be money laundering and its use for financing terror.

According to a report by news agency ANI, the Union minister in her address at a seminar during the ongoing spring meet of the International Monetary Fund (IMF) 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.”

Sitharaman in her Union Budget speech on February 1 proposed 30 per cent tax on proceeds of digital assets, which has been started from April 1. A tax deducted at soruce (TDS) of 1 per cent on virtual currency contributions exceeding Rs 10,000 per year was also recommended.

The minister reached Washington 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).

She took part in a high-level panel meet on ‘Money at a Crossroad’ hosted by Kristalina Georgieva, managing director, IMF, during the first day of the visit.

The finance minister has highlighted India’s performance in the digital world and the government’s efforts to build the digital infrastructure framework over the last decade. She stressed the increase of the digital adoption rate in India, especially during the 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 said.

IMF chief in her opening remarks said, “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.”

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

The finance minister will head to San Francisco on April 24 to engage with business leaders and will interact with faculty and students at Stanford University.

She will depart for India on April 27.