Union Minister Nirmala Sitharaman called for data exchange between jurisdictions for cryptocurrencies to combat offshore tax evasion during the last session of the third G20 Finance Ministers and Central Bank Governors on the sidelines of the annual IMF-World Bank meeting.
The Finance Minister had earlier said that given the concerns about the destabilising effect of cryptocurrencies on a country's monetary and fiscal stability, the Reserve Bank of India had recommended framing legislation on this sector. "The RBI is of the view that cryptocurrencies should be prohibited," Sitharaman reiterated.
"Any legislation for regulation or banning can be effective only after significant international collaboration on evaluation of the risks and benefits and evolution of common taxonomy and standards," she had said.
The Organisation for Economic Co-operation and Development (OECD) had on Tuesday announced a new Crypto-Asset Reporting Framework (CARF) for reporting and exchange of information regarding crypto-assets. The crypto-assets are not comprehensively covered by the G20 Common Reporting Standard (CRS) and increase the risk of tax evasion.
As per OECD, crypto assets can be transferred and held without any central administrator having full visibility of the transactions/holdings. The crypto market has also given rise to crypto-asset exchanges and wallet providers, many of which are unregulated, it said.
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On scaling up sustainable and digital infrastructure investments, the FM highlighted the need to leverage private sector participation. She also spoke on mobilising finance at the sub-national level for inclusive and quality infrastructure.
On the two-pillar solution, FM called for the participative engagement of all jurisdictions in negotiations and prioritising capacity building. She also said that international tax rules should be simple, administrable and generate meaningful revenue in developing countries.
