Finance Minister of India, Nirmala Sitharaman talked about the situation of crypto, stating that the central bank, RBI is in favor of banning cryptocurrencies.
During a session at the Lower House (Lok Sabha), she said:
“In view of the concerns expressed by RBI on the destabilizing effect of cryptocurrencies on the monetary and fiscal stability of a country, RBI has recommended for framing of legislation on this sector. RBI is of the view that cryptocurrencies should be prohibited.”
She also stated that international collaboration is the only way through which governments can lay effective legislation on cryptocurrencies. In her words:
“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.”
The stance on crypto is a mixed bag in the second most populous country in the world. While India has not seen a blanket ban on cryptocurrencies like its neighbor China has, it has not recognized them as legal. Moreover, the latest financial budget imposed a 30% tax on cryptocurrencies with an additional 1 percent TDS on crypto transactions.
This has severely affected the crypto traffic in India and with the current bearish market conditions, things don’t look good for crypto in general. On the other hand, the central bank of India, RBI is concerned about cryptocurrencies due to their cryptic nature along with the absence of any intrinsic value.