India Keeps the Door Open for Cryptocurrencies

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The Union Minister for Finance and Corporate Affairs, Smt. Nirmala Sitharaman addressing a Press Conference, in New Delhi on June 28, 2021.

It’s safe to say that India’s affair with cryptos hasn’t exactly been pleasant to follow. The country has always opposed the idea of Bitcoin, with the central bank set on banning cryptos. That has yet to happen, and the country may very well be changing its tune.

Finance minister Nirmala Sitharaman has recently stated that cryptos shouldn’t just be banned like that. The country and RBI (Reserve Bank of India) are well on their way to develop a digital cryptocurrency. However, the minister has obviously kept the door open to “futuristic things” that shouldn’t be shut out easily.

Open to Future Opportunities

Amid the hold of digital currencies around the world and the news that India could be developing its own, finance minister Nirmala Sitharaman has said that a decision on cryptocurrencies should be thought through. She has cited El Salvador’s Bitcoin adoption as the driving force behind it. It seems that El Salvador’s decision has changed how the world thinks of cryptos on a positive note. And that’s a good thing, because if it weren’t for it, many countries would just block future possibilities out.

India was one of them after the RBI circulated a memo telling all institutions to avoid accepting and using cryptocurrencies. It never turned into a law, but there wasn’t a positive sentiment around cryptocurrencies in the government. Nothing has changed in recent months until El Salvador made Bitcoin legal tender. It has changed the way the government looks at cryptocurrencies, although legal adoption is still a far way off.

The recent comments by finance minister Sitharaman are a sign that India may very well be changing its tune on cryptos. She has noted that the public opposed the move on the streets, but also said that if the experiment works, no one should close the door on Bitcoin. Of course, India would prefer to launch its digital currency first, but it’s important that it’s not shutting off futuristic things that easily.

In the interview, Sitharaman was asked if India should launch its own cryptocurrency, and she gave a diplomatic answer. “We have to evolve something that’s suitable for our system. India has fintech on its side and an economy full of possibilities. We have to be cautious and think things through, not shutting out on future possibilities.”

CBDC Launch by December?

According to RBI governor Shaktikanta Das plans for the digital currency are well underway. An early version of the currency may launch in December, with the RBI having a phased implementation strategy for it. The RBI is treading ground very carefully about the CBDC. It’s a completely new product and an opposite to everything cryptocurrencies represent. It will be controlled by the Reserve Bank of India and interchangeable with fiat currencies, so it’s not exactly a cryptocurrency.

The RBI is planning to treat and regulate cryptos separately. At the moment, it has recommended that all private cryptos except those issues to the state to be prohibited, although the government has not yet decided on it.

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September 22, 2021: • No Comments

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