As the Crypto craze grips the nation, Prime Minister Narendra Modi chaired a review meeting on digital currency on Saturday and decided to proactively engage with experts and other stakeholders on the evolving technology.
Sources said India is planning progressive and forward-looking measures on issues related to cryptocurrencies, a move that could be a departure from its earlier attempts to restrict the use of virtual coins
There have been calls in India to impose stricter rules for transactions in virtual coins as an unregulated environment may push more domestic savings toward the asset class and could endanger household savings.
India has had a hot-and-cold relationship with digital currencies in the past few years. In 2018, it effectively banned crypto transactions after a string of frauds following PM Modi’s sudden decision to eliminate 80% of the nation’s currencies, but the Supreme Court struck down the restriction in March 2020.
The Reserve Bank of India remains a critic but is now working on a digital currency. The government may bring in a crypto bill for the cabinet’s approval.
Last week, Reserve Bank of India (RBI) Shaktikanta Das has cautioned investors on the potential pitfalls of cryptocurrencies.
“Cryptocurrencies are a very serious concern from a macroeconomic and financial stability point of view,” Das said.
Das’s comments come at a time when the crypto craze remains elevated among Indian investors.
After Supreme Court overturned the RBI’s order, which effectively lifted the ban on cryptocurrency trading in India, the craze in India has grown at a furious rate.
The union government has not yet enacted a law on cryptocurrencies. It is in consultation with industry experts, comments from various officials and ministers
The government might largely want to set severe limits on the trading of cryptocurrencies in India in the larger public interest.
The meeting also concluded that attempts to mislead the country’s younger generation through over-promising and non-transparent advertisements should be stopped, the people said. It was also discussed that unregulated crypto markets cannot be allowed to become avenues for money laundering and terror financing, they said.
The meeting also considered global examples and best practices, the people said. It was highlighted that India should seek global partnerships and collective strategies on the issue, they said.
India’s parliamentary panel on finance is scheduled to meet industry experts and associations on challenges and opportunities in crypto finance on Monday.