In what can be a huge relief to cryptocurrency stakeholders in the country, Finance Minister Nirmala Sitharaman has hinted the Centre may not go for a blanket ban on digital currencies and that it's still formulating its opinion on the matter. She said the Centre was open to experimentation with new technologies and is not closing its minds for them.
As per the finance minister, the call on cryptocurrencies will be taken after deliberations with the Reserve Bank of India (RBI) and cabinet members are over. "A lot of negotiations and discussions are happening around the cryptocurrency with the Reserve Bank of India. RBI will be taking a call on what kind of unofficial cryptocurrency will have to be planned and how it has to be regulated. However we want to make sure that there is a window available for all kinds of experiments which will have to take place in the crypto world," she said at CNBC-TV18's IBLA townhall.
The finance minister has said the Centre's position on cryptocurrencies will be a "calibrated one". The FM clearly said the Centre is not averse to new technology, which is changing rapidly. "There will be a very calibrated position taken. A lot of mixed messages are coming from across the world. The world is moving fast with technology, we cannot pretend that we don't want it," she said.
The FM's remarks on cryptocurrency are in contrast with that of RBI Governor Shaktikanta Das, who had recently said the RBI had reservations regarding digital currencies. He said the apex bank was working on its digital currency. The RBI does not want to be left behind in the technological revolution, and the benefits of blockchain technology need to be capitalised on, he said, adding "we've certain concerns regarding cryptocurrencies."
This stance is in lines with the central government, which has revealed it'll bring a new bill on cryptocurrencies (The Cryptocurrency and Regulation of Official Digital Currency Bill, 2021). Notably, an inter-ministerial committee (IMC) on cryptocurrency has suggested a ban on private cryptocurrencies, like Bitcoin, in India. The same committee also pitched for the introduction of an RBI-regulated digital currency.
The RBI had virtually banned cryptocurrency trading in 2018. But the Supreme Court in 2019 asked the government to come up with cryptocurrency policies. In 2020, the SC down the RBI curbs on the cryptocurrency trade.