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Indian Finance minister Nirmala Sitharaman stated in Parliament that crypto regulation or banning is effective only after proper consultation with global stakeholders weighing on the risks and benefits.
In a response to a query in the lower house, Sitharaman wrote that the Reserve Bank of India [RBI] has recommended to the government that it should bring cryptocurrencies under the regulatory ambit and prohibit them.
“In view of the concerns expressed by the RBI on the destabilizing effect of cryptocurrencies on the monetary and fiscal stability of a country, the RBI has recommended for framing of legislation on this sector. The RBI believes that cryptocurrencies should be prohibited,” the finance minister replied in the Lok Sabha.
Sitharaman then proceeded to add the necessity of international collaboration to prevent any kind of exploitation of regulatory loopholes, given that cryptocurrencies are not bound by any border.
Crypto proponents in India were eagerly waiting for the bill to be presented during the Monsoon Session of Parliament that began today. However, no such bill has been listed for introduction as of now.
That said, the Indian govt’s continuous ambiguity has left industry top players frustrated.
India’s Crypto Bodies Divided Over Govt’s Stance
Differences have cropped up in India’s two main crypto groups over the government’s stance toward crypto. After the Internet and Mobile Association of India [IAMAI] dissolved The Blockchain and Crypto Assets Council or BACC recently.
The industry players are now planning on creating a new body.
Members of BACC felt that IAMAI was reluctant to push their cause, in terms of compliance with government regulations.
“We feel that IAMAI is trying to distance themselves from crypto as they feel the government is not in favor of private digital currencies,” a BACC member said.
Apart from that only the top 4-5 crypto firms contributed the major funds to BACC, which proved costly at times of low trading volumes due to the draconian tax structure.
“It was a costly association and there wasn’t any ROI for an industry which is under severe cost pressure,” said a crypto exchange CEO requesting anonymity.
On the other hand, IAMAI in a statement said it has decided to disband BACC since its advocacy does not align with IAMAI’s long-term objectives. IAMAI added it would continue to support the Indian government’s CBDC initiatives.