The hostile stance of the Indian government towards cryptocurrency continues to remain intact. The recent reports suggest that the government is concerned with the potential use of cryptocurrency in money laundering and terrorism-funding related activities and hence, is not very enthused about the prospects of digital currency in the country. Further, the high-level committee formed by the Indian government to draft a regulatory policy for the cryptocurrency has now expressed its apprehensions about the impact of crypto on India’s national currency, i.e., the rupee. The overall attitude of the Indian government towards the adoption and integration of cryptocurrency can be safely termed as the negative. The officials are constantly looking for excuses not to allow cryptocurrency to become one of the mediums of exchange. Like some other nations including China, the idea here is to downplay the role of cryptocurrency rather than embracing it.
High-level Committee for Regulatory Framework
The high-level committee formed by the government to look into prospects of cryptocurrency in the country is headed by Mr. Subhash Chandra Garg who is a senior bureaucrat and economic affairs secretary in the Ministry of Finance. The committee was formed initially in 2017, and it has now almost finalized the draft for regulating cryptocurrency-related activities in the country. According to the sources privy with the recommendations of the report, the committee is highly concerned about the potential impact of cryptocurrency usage on India’s national currency, the rupee.
The committee had meetings with a number of stakeholders including the representatives from the country’s crypto ecosystem and other anonymous sources. The panel is concerned about the possible destabilization of rupee if the cryptocurrency is allowed for the various payments and transaction systems. This concern has not gone down well with many crypto enthusiasts who think that no such kind of destabilization will happen at least in the near future. It is indeed frustrating to hear such lame excuses from the high-level committee and will surely dampen the spirit of many crypto followers who are eagerly waiting for the government nod on cryptocurrency.
Although it is true that allowing cryptocurrency for the payments in India will have some impact on the country’s national currency, many experts believe that this won’t happen until we reach a situation where mass adoption of cryptocurrency happens. According to the Rahul Raj, founder of the Koinex (Indian cryptocurrency exchange), it will take a considerable time to reach a situation where cryptocurrency starts influencing the rupee. It is very premature to think about this kind of concern at this stage of adoption, Raj added further. Just so you know, both the Reserve Bank of India and the high-level committee headed by Garg have given a thought to come up with their own digital currency although later on, the consideration fell out of the favor owing to a number of reasons. It is interesting to note that despite being negative on the cryptocurrency, the Indian government is very keen to leverage the potential of blockchain technology.
We have witnessed mixed reactions when it comes to the integration of cryptocurrency in India. The government officials and the high-level committee were scheduled to meet in January last month to further discuss the issue of cryptocurrency though till date; there is no clarity about the cryptocurrency regulatory framework in the country.