The Minister of Information Technology in India, Rajeev Chandrasekhar, said that there would be no problems using cryptocurrencies inside the nation provided the relevant regulations are adhered to.
Chandrasekhar commented on cryptos while speaking at an event in the city of Bengaluru, located in the southern part of the country. He claimed that there is “nothing new that forbids crypto as long as you follow the legal procedure.”
The comments were made just a few days after the country’s central bank cautioned investors to steer clear of cryptocurrency investments.
A change in heart?
The Reserve Bank of India (RBI) has long had a negative attitude toward digital assets, stating that the emerging asset class has no fundamental value amid this new development. This severe position has been maintained for a long time.
The nation’s central bank has repeatedly warned investors and the government to stay away from cryptocurrencies, noting the high degree of volatility and the potential for fraud and scams.
Just the week before, the governor of India’s central bank, Shaktikanta Das, said that cryptocurrencies do not have any inherent value and that their “worth is nothing but make-believe.” He said that cryptocurrencies are not even worth a tulip, referring to the well-known tulip craze bubble in the Netherlands.
“Every asset and every financial instrument is required to have some underpinning (value), but in the case of cryptocurrencies, there is no underlying… not even a tulip… The rise in the value of cryptocurrencies on the market is entirely based on speculation, though.”Rajeev Chandrasekhar, Indian Minister of Information Technology,
In addition, India, which is presiding over the G20, which has been making headlines amid regulation issues, at the moment, intends to make use of this chance to coordinate the worldwide regulation of cryptocurrencies.
As was reported in December of the previous year, India’s federal economic affairs secretary Ajay Seth said that to establish a policy consensus, the G20 nations will analyze the implications that cryptocurrencies have for the economy, monetary policy, and the banking sector.
India advocating for CBDCs
On the other hand, the nation’s central bank has advocated Central Bank Digital Currencies (CBDCs), which it has referred to as “the future of money.” In November of the previous year, India collaborated with nine banks to launch a test run of the country’s digital currency.
It is crucial to remember that India’s controversial cryptocurrency tax policies, which include a 30% tax on cryptocurrency revenue and a 1% tax deduction at source (TDS) when making a crypto transfer, have had a detrimental effect on trading volumes on regional cryptocurrency exchanges.
A study by Esya Centre, a technology policy think tank in Delhi, found that since implementing the country’s controversial tax policy, Indian crypto traders had shifted over $3.8 billion in trading activity from local exchanges to overseas crypto platforms.
Within the first six months of the current fiscal year, millions were “offshored,” the study added, and “an estimated 17 lakh customers migrated” from local crypto exchanges to their international equivalents.