India's Finance Minister Nirmala Sitharaman has taken a firm stance against Bitcoin (BTC) and other digital assets, stressing that they are not considered currencies.
Sitharaman said she expected the G20, an intergovernmental forum made up of 19 sovereign countries, the European Union (EU) and the African Union (AU), to draft a regulatory framework for cryptocurrencies. .
Sitharaman also emphasized that crypto assets do not function as traditional currencies issued by central banks, but are primarily used for trading, speculation, and commercial activities.
Sitharaman further highlighted how crypto assets thrive on trading and speculation.
Sitharaman argues that the absence of regulatory measures will have global implications, as cryptocurrencies have a potential impact on cross-border payments and illegal activities such as drug trafficking and terrorism. .
Sitharaman has participated in G20 discussions to address the challenges posed by crypto assets and is pushing for a unified global regulatory framework.
He emphasized the importance of international cooperation in developing strong regulations that can effectively address the risks associated with virtual currencies.
RBI governor warns of cryptocurrency risks
Although the Indian government has embraced blockchain technology, it maintains reservations about cryptocurrencies due to their volatility and speculative nature.
In India, virtual currencies do not have the status of legal tender and there are currently no dedicated regulations governing virtual currencies.
The recent introduction of the Cryptocurrency and Official Digital Currency Regulation Bill highlights the government's call for a global agreement on minimum cryptocurrency regulation and highlights the need for international cooperation.
Additionally, the Reserve Bank of India (RBI) has adopted a cautious approach towards cryptocurrencies, emphasizing the importance of regulatory vigilance to safeguard financial stability.
In 2022, Governor Shaktikanta Das expressed concern about the lack of fundamental value of cryptocurrencies and emphasized the need to maintain financial stability as cryptocurrencies grow in global popularity.
RBI's prudent strategy is aimed at safeguarding India's financial sovereignty and mitigating potential disruption to the banking system that could arise from unregulated crypto activities.
Through issuing warnings and issuing regulatory reminders, RBI aims to maintain resilience and security within India's financial ecosystem in response to the changing digital asset environment.
Das also warned that crypto “partying” is not without risks. Nevertheless, central banks remain vigilant in addressing new risks and challenges, carefully considering the possibility of introducing central bank digital currencies (CBDCs).
