No issue with cryptocurrencies in India if laws are followed: IT Minister

There was no issue with cryptos in India if all laws are followed, said Minister of State for Electronics and IT Rajeev Chandrasekhar on Thursday. This contradicted the view of the Reserve Bank of India (RBI) suggesting investors to stay away from cryptocurrencies.

Speaking at an event in Bengaluru, the IT minister said: “There is nothing today that outlaws crypto as long as you follow the legal process.”

Meanwhile, RBI Governor Shaktikanta Das has reiterated his call for an outright ban on cryptocurrencies, saying it should be banned, given its no underlying value in the market.

“Just like every asset, every financial product comes with some underlying value, hence the value of crypto is totally based on the make-believe factor,” Das said at a Business Today event.

The RBI Governor further said that crypto is a form of gambling without any underlying value and is nothing but a 100% speculation world.

Warning that legalising cryptocurrencies will lead to more dollarization of the economy, Das said cryptos masquerading as a financial product or financial asset, is a completely misplaced argument.

Regulations for the crypto sector

The country has been trying to come up with regulation for the crypto sector, with RBI time and again, highlighting that cryptocurrencies, if legalised, could lead to massive financial crisis.

Industry experts believe the government will introduce additional measures in the upcoming Budget following continuous warnings by the central bank on risks associated with cryptos.

In the last budget, the government established a taxation framework for cryptocurrencies, while Prime Minister Narendra Modi, at a World Economic Forum event in 2022, had stated that a collective global effort was needed to deal with the problems posed by the digital currencies.

Earlier, a deputy governor of the RBI, T Rabi Sankar had said that cryptocurrencies were akin to Ponzi schemes or worse and banning them was the most sensible option for the country.

To further its opposition to such currencies and also to take a lead over other central banks, the RBI has recently launched its own digital currency (CBDC or central bank digital currency), in the form of e–rupee on a pilot mode, first for the wholesale in October 2022 and a month later for retail customers.

On CBDC, Das said such fiat digital money is the future and central bank efforts are not motivated by a fear of missing out on the action created by the private cryptos.

With agency inputs

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