Indian Finance Minister stated a case for the prohibition of cryptocurrencies before the country’s parliament. She, however, stated that crypto regulations can only work if there is an international corporation about them.
Finance Minister Advocates Crypto Ban
Nirmala Sitharaman was at India’s lower chamber of parliament to answer some questions on Monday. The Parliament quizzed her about the impact and fate of cryptocurrencies in the Indian economy.
A member of the parliament, Thirumavalavan Thol, asked Sitharaman some specific questions. The first was if the central bank has legislative recommendations for restricting cryptocurrency flow in India. Secondly, if the executive has plans of sending any bill to restrict crypto usage in the country.
The mister responded by saying the Reserve Bank of India expressed its concerns about the effect of cryptocurrencies. These effects can be destabilizing to the fiscal and monetary policy of nations. She said the RBI has, therefore, recommended the parliament comes up with legislation.
Sitharaman explained further that the bank thinks cryptocurrencies should be banned. She stated that, nevertheless, cryptocurrencies are borderless by their nature. It, then, requires an international collaborative effort to curb regulatory evasions.
She said any legislation towards banning or regulation can only be effective with collaborations. Countries have to work together on risk evaluation and benefit assessments. They also have to work together on common standards and taxonomy.
Approaching Global Bodies
The government of India has had consultations with the World Bank and IMF on cryptocurrency policies. Sitharaman had called on the G20 last week to incorporate crypto into the Automatic Exchange of Information. It has more than 100 countries use it.
The Financial Stability Board recently announced that it is working on a crypto regulatory framework. It said its recommendations will be sent to the G20 central bank governors and finance ministers in October.
The Reserve Bank of India’s Governor, Shaktikanta Das, said cryptocurrencies present clear dangers. He emphasized that whatever gets value from make-belief is mere speculation with a sophisticated name.
Another view was dropped by the government’s Chief Economic Adviser, Anantha Nageswaran. He warned about the dangers of cryptocurrencies last month. He also talked about the risks involved in a lack of proper regulations.
By the way, crypto income in India carries a tax of 30%. There is also a 1% tax removed from source on crypto transactions that went into effect this July.
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