Indian FM has recently said that the government and the Reserve Bank of India are in complete harmony on crypto and CBDC. It was previously believed that the government was opposed to cryptocurrencies, but this aligns with recent reports about a possible CBDC.
The Indian central bank is reportedly working on a digital currency for use within its own borders. Earlier this month, RBI suggested it would issue its own cryptocurrency, which would be pegged to the rupee.
The statement also confirmed that crypto transactions are not illegal in India and there is no intention from any government body to ban it. Nowadays, people are starting to see crypto as an alternative investment option, rather than just a way to buy drugs or weapons anonymously online.
The Indian Finance Minister Nirmala Sitharaman and the Governor of India’s central bank Shaktikanta Das said the two government bodies have 100% harmony on cryptocurrency policy after a week packed with important economic developments.
How did the Indian government react to cryptocurrencies?
She also announced that Chinese central banks will be issuing central bank digital currency (CBDC) as of the next fiscal year, which begins in April 2022. Sitharaman presented the budget presentation for 2022-23 on February 1.
In his address to the Indian CBDC on February 3, Indian Prime Minister Narendra Modi emphasised the importance of strengthening the digital economy.
A lot of rumors have been circulating in the community indicating the government has legalized crypto assets, though the Indian Finance Minister clarified in her response to the discussion on February 11.
If the consultation gives me inputs, I will decide whether to ban or not to ban but I would just like to tax the profits as it is the government’s right to do so,” she added.
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The Indian Finance Minister and the bank’s chief both assert that they are having internal discussions regarding CBDCs and cryptocurrencies. Both are aware of their respective countries’ sensitivities on these subjects.
In terms of the RBI and Ministry, not just on crypto, but on everything else as well, I think there’s complete harmony in the way we work, respecting each other’s domain and being considerate of each other’s priorities and working with the nation’s interest in mind. At a press conference following the meeting of RBI’s central board, Sitharaman said there was no turfing.
RBI Governor Das clarified that consultations on CBDC are under way internally between RBI and the government. “We discussed any points we had with the government. I don’t want to elaborate further,” said Das.
Finance Minister Nirmala Sitharaman Addresses Cryptocurrency Regulations In India
As part of a first public appearance with the RBI Governor Shaktikanta Das on Monday, Indian Finance Minister Nirmala Sitharaman handled the contentious issue of cryptocurrency through the annual budget 2022-23.
In addition to reiterating their stance on crypto, some people were most intrigued by the yellow roses on the dais, the predominantly yellow sari worn by the Indian Finance Minister, and the yellow facemask worn by the RBI Governor. Yellow is a colour associated with union and marriage in this part of the world.
Her budget proposals delinked the RBI’s CBDC plans from the broader crypto debate. While the RBI could continue with the CBDC, Sitharaman brought in crypto activities. Digital assets such as bitcoin and ethereum are legal or not, but this was not explicitly stated.
As a result, it was viewed as a smart move by the government, one that helped it get out of a tight spot where pro- and anti-crypto opinions had become highly polarized.
It was also a rebuff to the RBI Governor, who has been highly critical of cryptocurrencies, claiming that they have the potential to destabilize the economy. Today both the Indian FM and the RBI Governor appeared to put their differences to rest saying “they are fully in harmony.”
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