India is not against blockchain technology, but currencies have to be monitored by either the government or the central bank, Finance Minister Nirmala Sitharaman said on Saturday.
See related article: India imposes money laundering regulations on crypto industry
Fast facts
- “[Blockchain] gives us so many options. It can be used in so many different ways. So we are not against the technology,” Sitharaman said at an event in Bengaluru.
- “But on currency, we think [it] has to be driven by either the government or the central bank. Otherwise, it can be like those that have collapsed, causing huge spillover effects all over the world, like FTX,” she said.
- The Reserve Bank of India, the nation’s central bank, has launched pilot trials for retail and wholesale central bank digital currencies. According to Sitharaman, the digital rupee intends to improve cross-border and bulk payments to minimize losses on arbitrage.
- India, the world’s most populous country, is aiming for a global consensus in regulating crypto assets.
- “Global order has become so interlinked that one country taking any step when it comes to regulating crypto assets will be ineffective because technology doesn’t care for boundaries or borders,” Sitharaman said.
- The South Asian nation is also looking to prepare students on cryptocurrency and artificial intelligence. It has announced the introduction of these topics in certain school curriculums from the next academic year.
- India has been tackling digital assets with caution. Last year, Sitharaman imposed a 30% flat tax on crypto income and a 1% tax deducted at source (TDS) on crypto trades above 10,000 Indian rupees (US$122).
- India also does not allow crypto traders to offset losses against gains. It has introduced a penalty equal to TDS for non-deduction, interest of 15% annually for late payment, and even imprisonment of up to six months.
- India is currently the president of Group of 20, an intergovernmental forum of the world’s major economies, and has listed cryptocurrency and its regulation as one of the agendas for discussion.
- See related article: Common regulatory framework for crypto to come during India’s G20 presidency, finance minister says