Government "not closing its mind" towards experimenting with crypto: FM Nirmala Sitharaman

With the government planning to introduce a Bill in Parliament to ban companies and individuals from dealing in cryptocurrencies, FM Nirmala Sitharaman said the government is not closing its mind towards "experimenting in the cryptocurrency world" and that a "very calibrated approach" will be taken.

In an interaction with CNBC-TV18, Sitharaman said negotiations and discussions around cryptocurrency are underway with the Reserve Bank of India (RBI).

"A lot of mixed messages are coming from across the world. The world is moving fast with technology, and we cannot pretend we don't want it. We are not closing our minds. We are certainly looking at ways in which experimentations can happen in the digital world, including cryptocurrency," she said.

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Earlier in February 2021, Reserve Bank of IndiaGovernor Shaktikanta Das said the apex bank is concerned over the impact cryptocurrencies may have on the financial stability in the economy, and has conveyed the same to the government.

"We have certain major concerns about cryptocurrencies. We have communicated them to the government. It is under consideration in the government, and I do expect, and I think sooner or later, the government will take a call, and if required, Parliament will also consider and decide," he had said.

Besides looking to ban what it termed "private cryptocurrencies", the government bill also seeks to create a framework for an official digital currency, or a Central Bank Digital Currency (CBDC). Das had said the digital currency is a work in progress.

Last month, India’s leading cryptocurrency companies launched a campaign #Indiawantsbitcoin to put the spotlight on the sizeable crypto ecosystem in the country, and the financial opportunities it has created for millions of Indian investors.

The campaign was launched by CoinDCX, WazirX, Unocoin, CoinSwitch Kuber, Zebpay, and PocketBitswith the hope that regulators will look after their concerns while drafting the framework of Cryptocurrency and Regulation of Official Digital Currency Bill.

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In the same month, US-based electric car maker Teslaopened the possibility of accepting Bitcoins as payments for its products and said it already bought $1.5 billion worth of the cryptocurrency. In its filings with the Securities and Exchange Commission (SEC), the Elon Musk-founded company said Bitcoin would provide more flexibility to further diversify and maximise the returns on its products.

In 2018, the RBI had banned Indian banks and other regulated entities from supporting cryptocurrency transactions. The Supreme Court overturned the decision last year in response to a petition by cryptocurrency exchanges.