India’s IT Official Says Crypto Is Not Banned As Long As It Follows The Rules. An Indian government official said there is currently nothing to ban cryptocurrencies in India as long as they follow the legal process.
Meanwhile, India’s central bank (Reserve Bank of India or RBI), has emphasized that cryptocurrencies have no underlying value. Indian government official Rajeev Chandrasekhar spoke about cryptocurrencies last Thursday at an event in Bengaluru.
Just so you know, Chandrasekhar is currently India’s Minister of Electronics and Information Technology and Minister of Skills Development and Entrepreneurship. He is also a member of the Rajya Sabha, the upper house of parliament.
He said, India has no problem with cryptocurrencies if all laws are complied with. This was disclosed to Reuters.
“Nothing today bans crypto as long as you follow the legal process,” said Chandrasekhar, quoted from Bitcoin, Sunday (22/1/2023).
The government of India has not yet established a regulatory framework for cryptocurrencies. In December last year, the government told parliament a crypto law could only be effective with significant international collaboration.
Meanwhile, Indian Finance Minister Nirmala Sitharaman recently said the government plans to discuss crypto regulations with G20 nations.
However, crypto income is already taxed at 30 percent in India, and a 1 percent withholding tax at source (TDS) is levied on crypto transactions. Earlier this month, the government revealed that they were launching a crypto awareness campaign.
Meanwhile, India’s central bank has suggested a total ban on cryptocurrencies such as bitcoin and ether. RBI Governor Shaktikanta Das said last week that cryptocurrencies have no underlying value, considering it would undermine RBI’s authority. In his view, crypto caused the next financial crisis if it was not banned.
Earlier, the Governor of the Central Bank of India, Shaktikanta Das warned on Wednesday, December 21, 2022, the next financial crisis will be caused by private cryptocurrencies, if these assets are allowed to grow.
“Cryptocurrencies pose enormous inherent risks to our macroeconomic and financial stability,” Das said, pointing to the recent FTX collapse as an example.
Das said his main concern was that cryptocurrencies had no underlying value, calling them “speculative” and adding he thought they should be banned.
India’s IT Official Says Crypto Is Not Banned As Long As It Follows The Rules. “Private cryptocurrency trading is a hundred percent speculative activity, and I still think it should be banned because, if it is allowed to grow, if you try to regulate it and let it grow, please mark my word, the next financial crisis will come from private cryptocurrencies,” explained Das .
Personal cryptocurrency according to Das refers to digital coins like bitcoin and others. Das’ comments come as the central bank is pushing to introduce its own digital version of the Indian rupee.
The Central Bank of India started a pilot program for digital rupees on December 1 for retail use in select cities. Certain users can transact using digital rupees via mobile apps and wallets.
The digital rupee is a type of central bank digital currency (CBDC). Many central banks around the world are considering issuing digital versions of their own currencies.
Das said CBDCs could speed up international money transfers and reduce logistical needs, such as printing banknotes.
China’s central bank is at the forefront of global development of CBDCs. Beijing has been trialling real-world use of its digital yuan since late 2020, expanding its availability to more users this year.
Digital currency regulation has come under increasing scrutiny this year following the USD 1.3 trillion cryptocurrency market value crash and the high-profile collapse of the FTX exchange.
Previously, the Central Bank of India (RBI) again expressed concern about the growing crypto ecosystem and suggested parts of it could be banned.
In its latest financial stability report, released December 29, 2022, the central bank said it would use its presidency of the G20 group to call for the development of a global regulatory framework for crypto assets.
The report highlights a list of crises that have hit the crypto industry in 2022. The central bank notes the volatility of cryptos, their high correlation with stocks, and their inability to act as a hedge against inflation, as well as problems. with governance.
“Rising prices in the ecosystem are driving the popularity of cryptocurrencies, especially among the younger segments of the population. In order to address potential future risks to financial stability and to protect consumers and investors, it is important to achieve a common approach to crypto assets,” the report stated, quoted from Cointelegraph, Sunday (1/1/2023).
The report looks at three options for crypto regulation. The first is the principle of equal-return-risk-regulation. Second, suggesting the possibility of banning crypto assets due to their real-life use cases is almost negligible.
This choice will be complicated by different legal systems and the individual rights of state powers globally. The third option, letting it explode without regulatory action, was deemed too risky for mainstream finance to pursue.
India’s IT Official Says Crypto Is Not Banned As Long As It Follows The Rules. “Under the presidency of the G20India, one of the priorities will be developing a framework for global regulation, including possible banning, unbacked crypto assets, stablecoins and DeFi,” the report continued.
Crypto regulation was a G20 priority for India since the start of his presidency. Despite the generally negative government position on cryptocurrencies, there are an estimated 115 million users in India. RBI is more bullish on central bank digital currencies. India also has one of the largest Web 3 workforces in the world.