State Minister for Electronics and Information Technology Rajeev Chandrasekhar said on Thursday that there is no problem with cryptocurrencies in India if all laws are followed, in comments that contradicted the Reserve Bank of India’s view which advised investors to stay away from crypto.
India has been trying to regulate cryptocurrencies, with a central bank deputy governor even calling for them to be banned, but the government has yet to legislate.
In the latest budget, the government set out a tax framework for cryptocurrencies, while Prime Minister Narendra Modi said at the World Economic Forum last year that a collective global effort was needed to address the problems of digital currencies.
Junior IT minister Rajeev Chandrasekhar, speaking at an event in the southern city of Bengaluru, said, “There is nothing today that bans crypto as long as you follow the legal process.”
In February 2022, a Reserve Bank of India (RBI) deputy governor, T. Rabi Sankar, said that cryptocurrencies were akin to Ponzi schemes or worse and that banning them was the most sensible option for India.
RBI Governor Shaktikanta Das also said in February that cryptocurrencies did not have the underlying value of even a tulip.
Last month, Das pushed for a ban on cryptocurrencies, calling crypto trading “a 100 percent speculative activity.” The RBI governor warned that the next financial crisis could be triggered by privately held cryptocurrencies, if such speculative tools were allowed to grow. “Cryptocurrencies… have huge inherent risks of macroeconomic and financial stability (perspective) and we have pointed them out,” Das said.
Illegal use of cryptocurrencies reportedly reached a record $20.1 billion (nearly Rs. 1,63,217 crore) last year. According to blockchain analytics firm Chainalysis, transactions related to sanctioned entities will increase more than 100,000 times by 2022 and account for 44 percent of last year’s illicit activity.
© Thomson Reuters 2023