Indian Minister’s Statement on Cryptocurrencies

Source: AdobeStock / WONG SZE FEI

So said India’s Minister of Information Technology, Rajeev Chandrasekhar cryptocurrencies did not pose any problem in the country if the applicable laws were respected.

Speaking at an event in the southern city of Bengaluru, Mr. Chandrasekhar said “Nothing today stops cryptocurrencies as long as one follows the legal procedure.” This comment comes just days after the country’s central bank advised investors to avoid cryptocurrencies.

of Reserve Bank of India (RBI) has long taken a tough stance on digital assets, showing this this asset class had no underlying value. The central bank has repeatedly warned investors and the government against cryptos, citing volatility as well as fraud and fraud risks.

Last week, Indian central bank governor Shaktikanta Das said cryptocurrencies had none has no intrinsic value and that “their perceived value was nothing more than window dressing”. He said that cryptos are not worth a tulip, alluding to celebrities tulipomania Dutch at the beginning of the last century.

“Every asset, every financial product must have a basis (value), but in the case of crypto, there is no basis…not even a tulip…and the rise in the price of the crypto market is based on illusion.”

India, which currently holds the G20 presidency, also plans to take advantage of this opportunity to coordinate global crypto regulation. India’s Federal Secretary for Economic Affairs, Ajay Seth, said last December that the G20 countries would study the implications of cryptocurrencies on the economy, monetary policy and the banking sector in order to reach a consensus.

On the other side, the country’s central bank has been a proponent of central bank digital currencies (CBDC), calling them “the future of money”. India even launched a pilot program of its own digital currency in collaboration with nine banks last November.

Note that India’s controversial cryptocurrency tax plans, which include a 30% tax on crypto income as well as a 1% withholding tax (TDS) when you pay a cryptocurrency transfer, have a negative impact on trading volumes on local exchanges.

According to a study by Esya Centre, a Delhi-based technology policy think tank, Indian cryptocurrency traders have moved over $3.8 billion in trading volume from local exchanges to international crypto platforms after the country’s controversial tax policy took effect.

“Of this amount, a cumulative volume of 3.055 million dollars has been moved in the six months of the current financial year,” the report states, adding that “it is estimated that 1.7 million the number of users who switched” from national crypto exchanges in the past year.

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