The finance minister of India Nirmala Sitharaman is putting a lot of people’s fears to rest given that her recent budget speech left out cryptocurrencies completely. While this may seem like the wrong move to make, it has seemingly calmed many viewers given that India has long been debating whether it should potentially instill a full ban on all crypto-related activity.
India Is Moving in Another Direction with Crypto
India first instilled a ban on all business partnerships between crypto firms and standard banks in India back in 2018. If you were a company that delved in digital assets in any way, you could not garner the services of traditional or standard banks, and thus you had to find alternative means of procuring the right financial tools.
However, in 2020, this ban was deemed unconstitutional by the nation’s Supreme Court, and thus it was reversed. The news was widely celebrated not only in India, but by crypto and blockchain fans all over the world, who now believed that India would become a huge crypto haven. While this attitude lasted a few months or so, things ultimately took a negative turn when the government announced that it was considering a full ban on crypto activity, not just on relationships between exchanges and banks.
According to the lower house of parliament Lok Sabha, things have changed somewhat in recent days. Now, regulators are considering only a ban on private coins. They are also looking into establishing a new centralized cryptocurrency that will be delved out and issued by the Reserve Bank of India (RBI).
Nischal Shetty – the founder of one of India’s most prominent crypto exchanges Wazir X – explained in a recent statement:
Cryptocurrencies are related to finance, and the fact that they were not mentioned in the budget shows that the government isn’t in a hurry to make a decision. Also, I don’t think the government will pass a bill without considering stakeholders’ views.
The idea of the RBI issuing a centralized digital coin is something of a two-sided platform. On the one hand, it shows that many traditional banks and financial institutions are beginning to recognize the power behind crypto, and should such a currency ever be established, it would likely lead to widespread crypto adoption – at least in the area it serves.
This May Not Have the Right Effect
However, digital currency has always been built on the idea of decentralization. Instead of being dolled out by institutions or banks, it is in the control of the people that use it. They can make their own financial decisions and have more say over their monetary futures, and the idea of centralized crypto could potentially get in the way.
While the budget speech ultimately ignored crypto, there was enough worry surrounding its contents that the price of bitcoin experienced a drop of around eight or nine percent, though at press time, it has seemingly recovered somewhat.