Global effort needed to regulate tech like cryptocurrency: FM Sitharaman

Global action can manage borderless technology and no country has a one-point formula, said finance minister Nirmala Sitharaman on Friday amid a debate on how India should regulate virtual currencies.

"Even as we are thinking at a national level, there should simultaneously be a global mechanism through which we are constantly monitoring the movement of technology. So whether it is your cryptocurrency, whether it is your technology-driven payment system, whether it is data privacy, whether it is ensuring that data itself is used ethically, regulating it will have to be a collective effort," she said at an event organised by Infinity Forum.  

India’s government has listed a Bill for Parliament’s winter session, seeking to ban all private cryptocurrencies but not their underlying technology. Since then, all sorts of arguments have been put forward to regulate these digital currencies and not to ban them.  

"All of us also recognise technology respects no physical border. Technology has the power to sweep through borders. It means global action is the only way in which you can regulate it effectively," said Sitharaman.

She said technology is evolving and there is no clear, pointed answer for regulating it.

"The regulations both executive and legislative, at least till now, have only been catching up with technology. So  long as the executive and legislature are only catching up, you will never be on the top of it. With technology, I am not sure they can ever be on-the-top- of-it-kind of situation because it is ever changing and it is ever evolving." 

Sitharaman highlighted that the regulatory framework itself will have to be constantly looking at evolving itself without waiting for the legislative back up for every incremental change in technology.

Indonesia's finance minister Mulyani Indrawati said the recent global agreement on taxing digital technology companies can show a path to govern borderless technology. "This is very critical for countries to work together." 

She said the fact that the private sector can have its own laws or make its own transactions in areas like cryptocurrency raises the question on the role of the sovereigns.