Forex in this article
Indian crypto strategy combined with international cooperation
India requires international crypto-regulation
Concrete plans for a digital rupee
Not only the Indian strategy but also international cooperation is the topic of the paper by Economy Minister Ajay Seth. At a press conference, he stressed, according to the Cointelegraph, that India cannot act in isolation on this issue. It needs “an approximate legal framework that all countries agree on together”. The purpose of the consultation paper is to strengthen cooperation with the IMF and the World Bank and to clarify India’s readiness for global crypto-regulation. It should then be presented to the Indian government and the third largest economy in Asia should be prepared for the challenges of cyber currencies in the national and international environment.
The digital rupee on the way
So far, the Indian government has been considered very restrictive when it comes to digital assets. Late last year, a ban on cryptocurrencies appeared to be on the way, but this quasi-ban was lifted earlier this year. The Indian government took a major step towards legalizing cryptocurrencies in February by taxing profits from the transfer of digital assets. Indian Finance Minister Nirmala Sitharaman announced the legalization of digital assets and the development of a digital rupee at the same time.
In recent months, skeptical statements about cryptocurrencies from the Reserve Bank of India (RBI) have risen, as BeInCrypto reports. A dollarization of the economy and a loss of monetary sovereignty are feared. Since the rupee can replace cryptocurrencies in both domestic and international transactions, it can also “replace part of the monetary system [und] undermine the RBI’s ability to regulate the flow of money into the system, “said an official at the Bank of India.
However, in its annual report on May 28, according to the Cointelegraph, the RBI presents a concrete multi-step plan to launch the digital rupee, which was announced in February. There will be a pre-launch feasibility study and testing phase to ensure that the proposed cyber unit will support financial stability and monetary policy not endanger the Indian government.
Global regulatory strategy instead of a ban
In an IMF panel discussion, India’s Deputy Governor, Rabi Sankar, once again showed his disapproval of cryptocurrencies: technology (the blockchain) is just a tool and unable to create independent currencies with real use cases. Therefore, “in the future, the central bank’s digital currencies will also kill the last use of cryptocurrencies”.
June 2 at 7:00 ET // At the Frontier: India’s Digital Payment System and Beyond will explore the latest developments in digital payments with a focus on lessons learned from India as well as the future with a significant role for the central bank’s digital currencies. https://t.co/ZSj7i15fBG pic.twitter.com/X6cVyHewEs
– IMF (@IMFNews) 31 May 2022
Asked about a possible ban on cryptocurrencies in India, Economy Minister Ajay Seth said at his ministry’s press conference that one should be aware that a national ban can still not be implemented without international consensus. Prime Minister Narendra Modi recently described cryptocurrencies as a global challenge at the World Economic Forum in Davos and called on the international community to coordinate regulation. He warned about the challenges and dangers of Bitcoin and Co. and urged the “global family” to take a “similar stance” and act together.
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