The finance minister of India, Nirmala Sitharaman, in the Lok Sabha session on 18 July 2022, answered the queries on cryptocurrency regulation. She said that the centre needs global collaboration to prohibit crypto assets.
Cryptocurrency has again been brought to the spotlight with this prohibition. She also referred to the Reserve Bank of India’s decision to ban digital assets completely.
“In view of the concerns expressed on the destabilising effect of cryptocurrencies on a country’s monetary and fiscal stability, the RBI has recommended framing legislation on this sector. The RBI believes that cryptocurrencies should be prohibited.”
However, the industry believes that it has a silver lining to it. Therefore, it is trying to read between the lines to analyse the positive impacts for the stakeholders and investors.
In the Monsoon session of the parliament, the finance minister further said:
“Cryptocurrencies are by definition borderless and require international collaboration to prevent regulatory arbitrage. Therefore, any legislation for regulation or for banning can be effective only after significant international collaboration on evaluation of the risks and benefits and evolution of common taxonomy and standards.”
In addition, RBI has been a critic of cryptocurrencies. They have always suggested a ban on virtual assets to protect the Indian market. It says that cryptos are a danger to the economic and financial stability of India.
But, the industry believes that the government has softened its stance on cryptocurrencies. They say it won’t ban the digital assets straightway, and it has scope for the industry to earn.
Khaleelulla Baig, co-founder and CEO of Koinsbasket, says that the finance minister is playing it safe. She is using the wait and watch strategy.
Also, he adds, “The next wave of crypto adoption in India will be so impactful that the government would be compelled to legalise and regulate the Web 3.0 space concerning the larger flow of public interest, economic incentives, and opportunity cost.”
In addition, many market experts believe that a ban is not a solution to digital coins. However, the government can regulate them to keep control of it. They say the crypto industry has great scope in the future, and the government cannot overlook that.
Besides, crypto and blockchain are global phenomena. So, it will be difficult for the government to regulate it with the various policies of countries.
But, there is no regulation or ban on cryptocurrency as of now. So, traders can invest in the market but keep the risks of the market in mind, as RBI has some great concerns over cryptocurrencies.
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