Is there a future for Cryptocurrency in India? There might be some if recent debates, media reports and experts opinions are to be believed. Even the Infosys non-executive chairman Nandan Nilekani recently opined that cryptocurrency could be acceptable in India as a store of value. Because he said, cryptocurrencies are not ideal for transactions in the country as India already have better alternatives (like UPI) for making transactions.
More recently, in the last week of March 2021, the government made it mandatory for companies to disclose investments made in cryptocurrencies. The move was welcomed by the crypto sector operating in the country. Experts said this move would open the door for all Indian companies to have Crypto on their balance sheets. “It will bring in a lot of transparency and will act as a comfort for Indian companies which are dealing in crypto-assets and were previously confused on how to put it in their books,” said Sumit Gupta, CEO & Co-founder, CoinDCX.
Slowly but steadily sentiments in favour of cryptocurrency is building in the country. In what form cryptocurrency would be acceptable to Indian lawmakers and regulators remains to be seen. However, the good thing for crypto lovers in the country is that discussions on this topic are not dead. Rather, they are getting louder even as cryptocurrency is not fully backed by the law. In the Parliament also, several members have been recently raising the issue of cryptocurrency/Bitcoin. In the month of March alone, at least five questions related to cryptocurrency were raised in Parliament. Here’s a look at the questions asked and the Government’s official responses:
Impact of bitcoin on regular currency (March 23)
Rajya Sabha member K.C. Ramamurthy asked whether any assessment has been made on how cryptocurrencies like Bitcoin impacts the regular currency of the country. He also asked about the details of countries that are in favour or permitting use of cryptocurrency, the countries that are opposing and the countries that have taken the middle path. Also, whether there are any plans to bring legislation to stop use of cryptocurrency in the country?
In a written reply, Minister of State in the Finance Ministry Anurag Thakur said, “The Reports of the Financial Stability Board (FSB) on Crypto-asset Markets, October, 2018 and on Regulation, Supervision and Oversight of “Global Stablecoin” Arrangements, October, 2020 bring out the probable financial stability risks arising from the crypto-assets and stablecoins.” He further said, “It is stated in the Report of FSB on crypto-asset markets that crypto-assets lack the key attributes of sovereign currencies and do not serve as a common means of payment, a stable store of value, or a mainstream unit of account.”
On the countries adopting cryptocurrency, Thakur said they can be be categorised under the four broad categories:
- Accommodative or liberal – like in Japan;
- Heavily regulated like in USA,
- Not currently regulated, like in lndia; and
- Prohibitive, like barring financial institutions within their borders from facilitating transactions involving cryptocurrencies, like in China.
With regard to the question on the Cryptocurrency ban, Thakur said the Government would take a decision on the recommendation of the high-level Inter-Ministerial Committee and the legislative proposal, if any, would be introduced in the Parliament following due process.
Regulating Cryptocurrency (March 23)
Rajya Sabha member Derek O’ Brien asked for the grounds on which Government is planning to propose a ban on cryptocurrencies. To this, Thakur reiterated that the decision will be based on the recommendation of the IMC and the legislative proposal, if any.
Watch the video of Nandan Nilekani’s views on cryptocurrency here:
Threats of cryptocurrency (March 23)
Rajya Sabha member Parimal Nathwani sought details on the threats of…