India’s Finance Minister Says Crypto Ban May not Happen and Government May Experiment with New Technologies

India’s finance minister, Nirmala Sitharaman, has hinted that the government may not go for a blanket ban on cryptocurrency in the country.

The finance minister has said that the government is open to experimentation with new technologies and is not closing its minds for them. Sitharaman added that the government is engaging discussions with the Reserve Bank of India and would take a very calibrated approach on the matter.

According to the finance minister, the call on cryptocurrencies would be taken after deliberations with cabinet members and the Reserve Bank of India (RBI) are over. She revealed that the RBI is engaging in lots of discussions and negotiations regarding cryptocurrencies and would take a call on how unofficial cryptocurrency would be handled and regulated.   

In an interview with CNBC-TV18 on March 6, Sitharaman said: “We want to make sure there is a window available for all kinds of experiments which will have to take place in the crypto world. It is not as if we are going to look inwards and say we are not going to have any of this. There will be a very calibrated position.”

The finance minister said that the government is not averse to new technology, and therefore the government’s position on crypto assets will be a “calibrated one.” She said that since the globe moves fast with technology, India’s government cannot look the other way. She further mentioned that in the fintech space, India is leading the way and several nations are looking to emulate India’s fintech-based developments.

India’s cryptocurrency stakeholders, who have been lobbying in support of positive regulation for the industry against an outright ban, have welcomed the recent statement from Sitharaman.

Plans to Issue National Cryptocurrency

The finance minister’s remarks on cryptocurrencies shed new light regarding the government’s plan on such digital assets. In late January, the government revealed plans to bring a new bill (The Cryptocurrency and Regulation of Official Digital Currency Bill, 2021) in the country’s lower house to ban private cryptocurrencies like Bitcoin and instead create a framework for the introduction of an official digital currency to be issued by the country’s Central bank.

In 2018, RBI banned all cryptocurrencies, a move aimed to protect the country’s financial system. But in 2019, India’s Supreme Court asked the government to come up with crypto policies. In 2020, the Supreme Court overturned the RBI’s ban and this was a big win for local crypto users and the victory enabled a dramatic increase in crypto trading volumes in the country.