Indian Finance Minister Expresses RBI’s Demand for Crypto Ban

• The Indian Finance Minister declared that the RBI recommended crypto regulation.
• Government expects international collaboration for any effective regulation.

The Indian Finance Minister, Nirmala Sitharaman has recently revealed that the Reserve Bank of India (RBI) has put forward a suggestion to the government, to frame cryptocurrency regulations. The government needs a global collaboration if the prohibition has to be put into effect, as per the Finance Minister. 

In Parliament she declared:

In view of the concerns expressed by the RBI on the destabilizing effect of cryptocurrencies on the monetary and fiscal stability of a country, the RBI has recommended framing of legislation on this sector. The RBI is of the view that cryptocurrencies should be prohibited.

Nirmala Sitharaman furtherly added that any legislation for prohibition can be effective only after a powerful international collaboration on assessing the risks and benefits, as well as the evolution of a common taxonomy and standards. 

The RBI also mentioned that cryptocurrencies are not a real currency because all the modern currency needs to be issued by the central authority such as the bank or the government.

Uncertain Stand Towards Cryptocurrency

This is not the first time that the Indian government has taken an unfriendly approach toward cryptocurrencies. From the beginning journey of cryptos in India, it faced so many cautions and circulars regarding banning from the government. 

The RBI announced in 2018, that the Indian banks would be unable to make cryptocurrency transactions. However, in 2020, the Supreme Court overturned the RBI circular, prohibiting the use of cryptocurrencies.

Following that, at the beginning of 2021, the government of India announced that it will introduce a new crypto bill to establish a sovereign digital currency and then outright prohibit private cryptocurrencies.

In November, The Standing Committee on Finance came to the conclusion that cryptocurrencies should be regulated rather than banned. Additionally, In the current year, the Indian government also implemented a tax on crypto transactions and incomes earned through that mode.

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