Forex in this article
Indian crypto strategy coupled with international collaboration
India calls for international crypto regulation
Concrete plans for a digital rupee
Not only the Indian strategy, but also international cooperation are the subject of the paper by Economy Minister Ajay Seth. At a press conference, according to Cointelegraph, he stressed that India cannot act in isolation on this issue. “An approximate legal framework that all countries can agree on together” is needed. The consultation paper aims to strengthen cooperation with the IMF and World Bank and clarify India’s readiness for global crypto regulation. It should then be presented to the Indian government and the third largest economy in Asia should be prepared for the challenges of cyber currencies in the national and international environment.
The digital rupee on the way
So far, the Indian government has been considered very restrictive when it comes to digital assets. At the end of last year, a ban on cryptocurrencies seemed to be on the way, but this quasi-ban was lifted at the beginning of this year. The Indian government took a big step towards legalizing cryptocurrencies in February by taxing profits from the transfer of digital assets. Indian Finance Minister Nirmala Sitharaman announced the legalization of digital assets and the development of a digital rupee at the same time.
In recent months, skeptical statements about crypto currencies from the Indian central bank (Reserve Bank of India RBI) have increased, as BeInCrypto reports. A dollarization of the economy and a loss of monetary policy sovereignty are feared. Since the rupee can be replaced by cryptocurrencies in both domestic and international transactions, it could also “replace part of the monetary system [und] undermine the RBI’s ability to regulate the flow of money in the system,” said an official at India’s central bank.
However, in its annual report of May 28, according to Cointelegraph, the RBI lays out a concrete, multi-stage plan to launch the digital rupee announced in February. There will be a pre-launch feasibility study and testing phase to ensure the proposed cyber device will support financial stability and monetary policy not endanger the Indian government.
Global regulatory strategy instead of ban
At an IMF panel discussion, India’s deputy central bank governor, Rabi Sankar, again showed his disapproval of cryptocurrencies: technology (the blockchain) is merely a tool and incapable of creating standalone currencies with real use cases. Therefore, in the future, “central bank digital currencies would also kill the last use case of cryptocurrencies”.
June 2 at 7:00am ET // At the Frontier: India’s Digital Payment System and Beyond will explore the latest developments in digital payments with a focus on lessons from India as well as future with a significant role for Central Bank Digital Currencies. https://t.co/ZSj7i15fBG pic.twitter.com/X6cVyHewEs
– IMF (@IMFNews) May 31, 2022
When asked about a possible ban on cryptocurrencies in India, Economy Minister Ajay Seth said at his ministry’s press conference that one must be aware that a national ban cannot be implemented without international consensus anyway. Prime Minister Narendra Modi recently described cryptocurrencies as a global challenge at the World Economic Forum in Davos and called for the international community to coordinate regulation. He warned of the challenges and dangers of Bitcoin and Co. and called on the “global family” to adopt a “similar attitude” and act together.
Editorial office finanzen.net
Image sources: Stanislav Duben / Shutterstock.com, rawf8 / Shutterstock.com
#Bitcoin #Ethereum #India #pushing #crypto #regulation