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Mint
4 days ago
- Business
- Mint
Global oversight needed for the tokenization of currency: Nirmala Sitharaman
Finance minister Nirmala Sitharaman on Saturday called for a redefinition of multilateral institutions to provide effective oversight as countries explore the tokenization of currency, warning of rising complexity and the lack of global frameworks to govern this shift. Speaking at the release of a book, A World in Flux: India's Economic Priorities, in New Delhi, she said that multilateral institutions have never been left in limbo in the last 100 years. The finance minister said this is true for financial as well as strategic institutions. Every multilateral institution that has successfully served earlier is now wondering where it is, what its immediate future will be, and how it will redefine itself. Her concerns about the tokenization of currency—the transformation of money into digital tokens on a blockchain or distributed ledger—come at a time when cryptocurrencies are increasingly making their way into the financial world. The Reserve Bank of India has cautioned multiple times that virtual currencies are risky. However, the US government under President Donald Trump is encouraging more innovation in this area. In January, Trump signed an executive order to ensure Washington's leadership in digital financial technology. He then set up a working group to develop a federal regulatory framework governing digital assets, including stablecoins, and to evaluate the creation of a strategic national digital assets stockpile. Trump also revoked the Treasury Department's 'Framework for International Engagement on Digital Assets, which suppressed innovation and undermined US economic liberty and global leadership in digital finance'. The US is also trying to become the 'crypto capital of the planet', according to the presidential order. Sitharaman said multilateral institutions have to be redefined. 'If you could go for a currency with no gold backing sometime in the 70s, now it is already moving towards tokenization and is that something on which we see the depth of?' The minister also asked if there was any framework under which any country could unilaterally take that route. 'Who is going to have oversight on these sorts of things?' The minister said the depth and the complexity of the situation were increasing. The book, A World in Flux: India's Economic Priorities, edited by Amita Batra, former chairperson at the Centre for South Asian Studies and A.K. Bhattacharya, editorial director at Business Standard is published by Rupa Publications India Pvt. Ltd. Sitharaman also said in response to a question about the normalization of economic ties with China that it was right to point out that there are calls for greater access and interaction with China, and possibly to open some windows. 'That is not just from our side, even the Chinese have been approaching through the ministry of external affairs,' the minister said, referring to external affairs minister S. Jaishankar's recent visit to China. 'There is some kind of beginning. As to how far it will go, it is something we will have to wait and see,' the minister said, adding it might help the economy, and a sense of caution would have to be built in. To a question on investments in the economy, she said that companies' and banks' balance sheets have become healthier, and the corporate tax rate was cut to boost investments. Referring to what the minister was hearing from observers and her own interactions with business leaders, Sitharaman asked if businesses were sitting on passive, investible funds. 'That is, investible funds that are being engaged passively rather than investing and expanding capacity. That is an issue that I would obviously want the industry to speak about.' On trade, she said bilateral trade has now taken priority over multilateral trade, though she could not comment on the merits of this trend. The minister added that negotiations for trade deals are well progressing with the US and the EU.
The Star
09-05-2025
- Politics
- The Star
Why China may find it hard to play peacemaker in India-Pakistan conflict
The escalation of the conflict between India and Pakistan has exposed the limits of China's role as a Global South leader and peace broker, and it leaves Beijing with difficult choices to make, analysts say. India claims that it launched missiles and deadly attacks on nine sites in Pakistan and Pakistan-administered Kashmir on Wednesday morning in retaliation for what it believes was an Islamabad-backed militant attack on April 22. Pakistan said it shot down five Indian Air Force jets and a drone in response. Do you have questions about the biggest topics and trends from around the world? Get the answers with SCMP Knowledge, our new platform of curated content with explainers, FAQs, analyses and infographics brought to you by our award-winning team. China expressed 'regret' over India's attacks on Pakistan and called for restraint, urging the two neighbours to 'avoid taking actions that would further complicate the situation'. Foreign ministry spokesman Lin Jian told reporters that China was 'willing to continue its constructive role in alleviating the current regional tensions' but did not say if Beijing was in contact with New Delhi or Islamabad. Indian leaders gathered for a security meeting on Wednesday afternoon, as countries around the world called for a de-escalation of the conflict and a diplomatic solution to the crisis. According to analysts, China is not likely to take the lead on negotiations between Hindu-majority India and Muslim-majority Pakistan, which have been locked in a decades-long dispute over the Kashmir region. Lin Minwang, a professor with the Centre for South Asian Studies at Fudan University, said China would 'hardly be able to lead the negotiations'. While Beijing had sought to position itself as a peace broker in recent years, especially among Global South countries, Lin said its 'very good relations' with Pakistan put it in 'an awkward position'. 'India will think that China will definitely stand on the side of Pakistan,' he said. 'Another factor is that India always thinks that it is of similar size to China, and that it is on the same level as China, so it will hardly accept China playing a mediating role.' He added that if there was further escalation from India it would draw condemnation not just from China but also from the United Nations Security Council. China and India are regional rivals but they also have unresolved border disputes going back decades, despite agreeing to end a four-year military stand-off last year. China and Pakistan, meanwhile, have expanded security cooperation and their 'ironclad friendship', and China is Pakistan's main weapons supplier. Pradeep Taneja, a senior lecturer in Asian studies at the University of Melbourne, said given that China was the 'key backer of Pakistan' diplomatically, 'if this conflict escalates into a full-blown war between India and Pakistan, then China obviously would be affected by it, in the sense that China will have to take clear positions'. He said it would 'certainly complicate' China's stance due to India being the more important economic partner of its two neighbours, and their cooperation in 'defending the Global South'. Beijing has stepped up diplomatic efforts in the region and the Global South, including New Delhi, as Washington has imposed tariffs on countries around the world. India, however, has raised concerns over an increasing trade deficit with China and the 'dumping' of Chinese goods since the US hit China with punishing tariffs. Domestic terrorism concerns were also a factor in China's response to the India-Pakistan conflict, according to Jagannath Panda, head of the Stockholm Centre for South Asian and Indo-Pacific Affairs at the Institute for Security and Development Policy in Sweden. 'China faces concerns as well as threats from radical outfits of the Uygurs, which have stronger linkages with some of the terrorist outfits that are being operated and sponsored by Pakistan from its soil,' Panda said. 'China will be caught in a delicate situation not to overreact to India's 'Operation Sindoor' against the Pakistani-sponsored terrorist outfits,' he said. 'China's response ... will test the character of Beijing – if it still wants to improve China-India relations vis-a-vis Pakistan.' In October, Chinese President Xi Jinping met Indian Prime Minister Narendra Modi for the first time in five years. They agreed to improve ties, including resuming direct flights between the two nations, but progress has been slow. No militant group has claimed responsibility for the April 22 attack on 26 tourists in the disputed district of Pahalgam. India accused Pakistan of indirectly supporting the attack, a claim Islamabad strongly denied. The UNSC at an emergency meeting on Monday repeated its condemnation of the Pahalgam attack and urged India and Pakistan to 'exercise calm and restraint, to de-escalate tensions, and to resolve their differences peacefully'. Panda said Beijing had taken a 'stronger yet selective position' on countering terrorism-related resolutions at the UN, and the world would expect it to show a 'stronger willingness to deal with terrorism' as a permanent member of the UNSC. But he said given Beijing's strategic interest in Kashmir affairs it would continue to support Islamabad and that 'shouldn't surprise New Delhi'. Liu Zongyi, director of the Centre for South Asia Studies at the Shanghai Institutes for International Studies, said he believed China had 'actively' engaged with diplomats from both India and Pakistan. 'Whether peace can be negotiated depends largely on the attitude of India,' he said, noting that it was not in India's interests to go to war with Pakistan. More from South China Morning Post: For the latest news from the South China Morning Post download our mobile app. Copyright 2025.
