‘India Needs To Think It Through’: Indian Finance Minister On Cryptocurrencies

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In an interview published on September 21, Indian Finance Minister Nirmala Sitharaman has spoken about the country’s stance on cryptocurrency, which is practically out of the purview of any existing law. However, she has refrained from clarifying whether the Indian government is going to allow legitimacy to cryptocurrencies or ban them as it was considering previously.

“We have to evolve something suitable for our systems. India has the strength of technology; fintech gives us the command over the instrumentalities with which you can play; our economy is full of possibilities. So we have to be cautious, but we have to think it through,” she said.

Even though she has not approved the adoption of cryptocurrencies, there is a notable change in the tone of the Indian Finance Minister as she seems to take note of the growing popularity of virtual coins globally.

“This is not an era where you can say I don’t care about what’s happening, or we don’t want to do anything. At the same time, are we yet ready to go the El Salvador way? We have to be sure that a futuristic thing can’t be shut out,” she was quoted by the leading newspaper the Hindustan Times.

In a question related to the decision of the El Salvador government to allow bitcoin as legal tender in the country, Sitharaman said, it’s part of the ongoing experimentation where governments are trying the options available to them. She also hinted that India may be on course to launch its CBDC. “El Salvador may be an exceptional place where they tried some experimentation. There are other countries that are talking about the central bank having a legitimate cryptocurrency. That could be a possibility,” she said.

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However, she has sounded skeptical about cryptocurrencies playing the role of mainstream currency. In the debate on the adoption of cryptocurrency, a common refrain has been that a certain level of education is required for people to use cryptocurrencies. The Indian finance minister said that the actual question was the efficiency of the cryptocurrencies for their mainstream adoption.

“It’s not a question of literacy or understanding – it’s also a question of to what extent this is a transparent currency; is it going to be a currency available for everyone?”, she asked.

However, there was a note of hope and optimism for crypto enthusiasts. “We have to be sure that a futuristic thing can’t be shut out,” she said in what could be summed up as the government’s stance on cryptocurrencies.