FM Sitharaman, IMF chief Georgieva discuss significance of common crypto regulation

Finance Minister Nirmala Sitharaman with IMF managing director Kristalina Georgieva. (Photo courtesy: Twitter)

New Delhi: Finance Minister Nirmala Sitharaman and International Monetary Fund (IMF) managing director Kristalina Georgieva discussed the importance of regulating crypto assets along with digital currency and the need to have a globally coordinated approach on the issue.

Plus, FM Sitharaman said the IMF should play a key role in this regard. India has always supported synchronised global coordination on the issue of regulation on crypto assets.

It is worth noting that India introduced a 30 per cent tax on crypto assets with effect from April 1. Also, a 1 per cent tax deducted at source (TDS) on payment of virtual digital assets or cryptocurrencies beyond Rs 10,000 in a year and taxation of such gifts in the hands of recipients will be applicable from July 1.

Georgieva met the FM in New Delhi and discussed a wide range of issues, including India’s upcoming G20 presidency and IMF’s support. The IMF MD mentioned that despite the global geopolitical uncertainty, India continues to be a bright spot in the global economy.

The FM and the IMF chief discussed concerns on key downside risks to the global economy, and the cross border effects because of the geopolitical situation and tighter financial conditions. Also, they recognised the effect of hike in global inflation because of huge jump in food and energy prices and the fact that international debt has impacted low income countries the most.

FM Sitharaman emphasised the need to ensure energy security for all. She said the importance of coordinated policy measures and multilateralism for mobilising adequate resources for climate action, mentioning that committed funds by the developed economies are yet to become available.

The FM said carbon pricing may not be a feasible policy tool for climate action. She further mentioned the importance of timely conclusion of the 16th general review of quotas (GRQ) in a manner that addresses inequity and imbalances in the global economy.

The IMF agreed with FM Sitharaman that for the Washington-based multilateral lender to remain relevant it is vital that a consensus on GRQ be reached to reflect the changed status of emerging market economies in the world order.

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