No Plans for Boosting Cryptocurrency Sector in India: Govt
Moneylife Digital Team 06 December 2021
The Indian government has no plans for boosting the cryptocurrency sector in the country, says Pankaj Chaudhary, Union minister of state for finance.
 
Giving a written reply in the Lok Sabha, the minister reiterated that cryptocurrencies are currently unregulated and the government does not collect data on the cryptocurrency sector. “A bill on cryptocurrency and regulation of official digital currency has been included for introduction in the Lok Sabha Bulletin-Part II as part of government business expected to be taken up during the seventh session of 17th Lok Sabha.”
 
Jagdambika Pal, a member of Parliament (MP), had asked for data available for active cryptocurrency exchange companies working in India for both, local developers and international developers and the details of cyberattacks that happened on these companies in the past two years.
 
He also asked about the size of the cryptocurrency market in India and if it is trustworthy. However, Mr Chaudhary, the state minister, only says a bill will be introduced in the current session of the Parliament.
Replying to another question about digital currency asked by Rakesh Singh, an MP, the minister said a central bank introduces central bank digital currency (CBDC). “Government has received a proposal from the Reserve Bank of India (RBI) in October 2021 for an amendment to the RBI Act to enhance the scope of the definition of ‘bank note’ to include currency in digital form. RBI has been examining use cases and working out a phased implementation strategy for the introduction of CBDC with little or no disruption,” he said. 
 
According to the state minister, the introduction of CBDC can provide significant benefits, such as reduced dependency on cash, higher seigniorage due to lower transaction costs, and reduced settlement risk. He said, “Introduction of CBDC would also possibly lead to a more robust, efficient, trusted, regulated and legal tender-based payments option. There are also associated risks which need to be carefully evaluated against the potential benefits.”
 
“As CBDC is backed by the central bank of a country, apart from other benefits, it will not have volatility which is normally associated with the private cryptocurrencies,” the state minister for finance said.
Comments
Kamal Garg
5 months ago
I think a really sensible thinking in the government on how to tackle cryptocurrency issue. It can be classified as an asset class but cannot be a legal tender and therefore cannot be converted into INR. The government backed CBDC is also a very logical and sensible idea.
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