Ban On Crypto Unlikely As Finance Ministry Indicates Exploring Digital Tokens

The government reconsidering its stance on cryptos has relaxed frayed nerves in the industry

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The Indian government seems to be reconsidering its stance on banning cryptocurrencies. 

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While addressing an event on Saturday, Anurag Thakur, minister of state for finance, said the government is open to evaluate and explore new technologies, including cryptocurrencies, for improving governance. 

"Blockchain is a new emerging technology. Cryptocurrency is a form of digital currency. I firmly believe that we must always evaluate, explore and encourage new ideas with an open mind," he said responding to a media query about cryptocurrency at an event organized by Entrepreneurs' Organisation Punjab.

Just a day before, finance minister Nirmala Sithraman in an interview with CNBC-TV18 said the government is yet to take a decision on cryptocurrencies and will ensure a window to allow all kinds of experiments in the crypto world before arriving at a conclusion. 

“It is not as if we are going to look inwards and say we are not going to have any of this. There will be a very calibrated position. Mixed messages are coming across the world. I don’t think there is a complete go this way or that way in this matter. We will have to take a very calibrated position,” she said. 

“The world is moving fast with technology. We cannot pretend we don't want it. At the same time, we have to recognize with fintech we led the way. Many countries are looking at us for fintech based steps and the kind of things we have done in the payment duniya.

These remarks are in a direct contrast to the finance ministry’s statements in the last one month that suggested a blanket ban on the digital tokens. 

Earlier in February, Sitharaman, while responding to a question in the Rajya Sabha, said an inter-ministerial committee (IMC), which was constituted to study the issues and propose specific actions related to cryptocurrencies, has recommended in its report that except any virtual currencies issued by the government, all private cryptocurrencies will be prohibited in the country.

Referring to the same committee, Thakur on Saturday said the high-level IMC was formed by the central government to accept cryptocurrency as a lawful and legal tender in India. "The government would take a decision on the recommendations of the committee and the legislative proposal, if any, would be introduced in the Parliament following the due process,” he said. 

The government reconsidering its stance on cryptos has relaxed frayed nerves in the industry. 

“The FM’s stance on ‘considering a calibrated approach’ is an encouraging sign,” said Sumit Gupta, co-founder and CEO, CoinDCX, adding that FM’s statement is a sign of the government’s resolve to digitise India and make it Atmanirbhar

“We have always reiterated the need for regulation, taxation and transparency for our sector...We believe crypto as an asset has huge potential and if properly administered can help India earn sizable revenue.”

Nischal Shetty, founder and CEO, WazirX took to Twitter following FM Sithraman’s interview to welcome the government’s shift in its stance. “Our FM has made it clear that India will compete globally in crypto,” he said. 

In another tweet, referring to Thakur’s comments, he said the industry is now convinced that the leaders are pro-innovation and will support the country’s youth to innovate and grow, but the government should include the crypto industry in its regulatory process.

“Inter-ministerial committee has theoretical knowledge...we (crypto stakeholders) have practical knowledge. Let’s combine both and propel innovation in India.”

Shetty started an online campaign #IndiaWantsCrypto on Twitter two years back in a bid to bring in positive crypto regulations in the country. The campaign gained steam recently as part of the industry’s lobbying effort after the government implied a possible blanket ban on the digital token. 

Shipra Singh

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Entrepreneur Staff

Now a freelance journalist, ealier steered the Wealth section on the Entrepreneur website, covering everything finance. Previously a personal finance reporter at The Economic Times and Outlook Money.