India will not “shut off all cryptocurrency” and allow “experiments” with the technology behind the alternative form of payment, said Finance Minister Nirmala Sitharaman on Sunday, adding the country’s central bank would decide finally.
Bitcoin, the world’s biggest cryptocurrency, on Saturday crossed a record high of $60,000. Bitcoin has risen sharply this year, broadly outperforming conventional asset classes, partly due to broader acceptance as a form of payment. India’s government is preparing a Bill on cryptocurrencies after an inter-ministerial panel proposed a ban and before that, the Supreme Court struck down the Reserve Bank of India’s restrictions on lenders providing services to crypto trading platforms.
“From our (the finance ministry’s) side we are very clear that we are not shutting all options. We will allow certain window for people to do experiments on blockchain, bitcoins, or cryptocurrency,” said Sitharaman at the India Today Conclave.
Financial technology (fintech) firms depend on blockchain, the backbone of cryptocurrencies, and they should have a window available. “We are not going to shut it off all,” she said.
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“A lot of fintech companies have made a lot of progress in it. We have got several presentations. Much works at some states level are happening. And we want to take it in a big way in IFSC or Gift City in Gandhinagar,” she said, referring to a meeting being called in the Gujarat city.
A Cabinet note detailing rules would be ready soon. “It (Cabinet note) is nearing completion, and then it would be taken for the Cabinet of course. The Supreme Court had commented on the cryptocurrency. We are very clear that the Reserve Bank will take a call on official cryptocurrency.”
The Supreme Court, in March 2020, had struck down the RBI’s restrictions on banks to stop providing services to crypto trading platforms. This led to uncertainty about the status of cryptocurrencies in India
“Once Parliament is over, I will probably spend more time executing and planning that. On fintech, on blockchain, there is a lot of work going on in India and we will certainly encourage that.”
Anurag Thakur, minister of state for finance, has told Parliament there are different definitions of cryptocurrencies the world over. An inter-ministerial committee had first suggested a draft Bill to ban cryptocurrencies by whatever name called, means any information or code or number or token not being part of any official digital currency.
Existing laws are inadequate to deal with the subject, said Thakur. The committee has given its report, he said, adding an empowered technology group had met on the issue earlier.
Thakur said that the committee of secretaries, chaired by the Cabinet secretary, has also given its report, and the Bill is being finalized and will be sent to Cabinet soon.
“The government will take a decision on the recommendations of the IMC and the legislative proposal, if any, will be introduced in Parliament following due process,” Sitharaman had said in a written response to a question in the Rajya Sabha.
The Supreme Court, in March 2020, had struck down the RBI’s restrictions on banks to stop providing services to crypto trading platforms. This led to uncertainty about the status of cryptocurrencies in India.
A new legislation will clear the government’s stand on cryptocurrencies.