India’s government supports global cooperation if digital assets, including cryptocurrencies, need to be banned or regulated, Finance Minister Nirmala Sitharaman said Monday. However, the Reserve Bank of India has clarified its stance on digital assets. Chief Financial Officer Nirmala Sitharaman said the Reserve Bank of India (RBI) advised the government to set cryptocurrency rules. Finance Minister Nirmala Sitharaman said on Monday that the Reserve Bank of India (RBI) had raised concerns about cryptocurrencies and asked the government to ban them. Any effective regulation or ban on cryptocurrencies would require “international cooperation.” Currency has no borders. The Reserve Bank of India (RBI) has proposed that the government enact legislation on cryptocurrencies and “ban” cryptocurrencies, citing their “destabilising impact” on monetary and fiscal stability.
On whether the central bank has recorded its concerns about the negative impact of cryptocurrencies on the Indian economy, Finance Minister Nirmala Sitharaman said: The RBI has stated that cryptocurrencies are not a currency as the central bank must issue every modern currency. Meanwhile, both the finance minister and the RBI have backed India‘s response to a cryptocurrency, a central bank digital currency (CBDC) called the digital rupee.
However, the RBI has been consistent in its stance on cryptocurrencies. This is not the first time the RBI has taken a stand against cryptocurrencies. As India tries to regulate and control cryptocurrencies, the RBI tries to get the government to ban cryptocurrencies completely. The Indian crypto community, which has over 100 million investors, has suggested that the government may introduce a legislative framework to regulate the crypto sector at the monsoon session of parliament.
Since then, the Indian government has backed away from banning cryptocurrencies after the draconian bill sparked a massive backlash in the industry. The Indian government has been fighting cryptocurrency regulation for years but has yet to submit a consultation paper that brings clarity. Questions included whether the RBI issued a warning restricting the use of cryptocurrencies in India in the past ten years and whether the government plans to pass a law limiting the use of cryptocurrencies in India.
The ministers’ comments are gaining importance as they suggest that a law to limit the use of cryptocurrencies, which was included in parliament’s business list in two sessions last year, is out of the question until a global pact in some form will not be fixed on their rules. He added that the high-level inter-ministerial committee (IMC) had submitted its report: India will review its recommendations on digital currencies, and “a legislative proposal, if any, will be submitted to Parliament after due process.”
With an already controversial regulatory stance on cryptocurrencies, the most recent comments from finance ministers on the RBI’s stance on cryptocurrencies will be another blow to the Indian crypto industry and over 100 million crypto investors in India. The Reserve Bank of India has repeatedly warned about the macroeconomic implications of cryptocurrencies and has highlighted the problems of cryptocurrencies by questioning the underlying fundamentals.