New Delhi(India): Finance Minister Nirmala Sitharaman said on Monday, July, that the Indian government supports global cooperation if there is a need to restrict or regulate digital assets, including cryptocurrencies, even though the Reserve Bank of India has clarified its stance on these assets. 18. She was replying to a written question on cryptocurrency by MP Thiruma Valvan Thol in Parliament.
Thol asked the finance minister whether the central bank had issued instructions, circulars, directions, warnings or anything else about the issuance, buying, selling, holding and circulation of cryptocurrencies in the last ten years in India. “RBI has been cautioning users, holders, and traders of Virtual Currencies (VCs) vide public notices on December 24, 2013, February 01, 2017, and December 05, 2017, that dealing in VCs is associated with potential economic, financial, operational, legal, customer protection and security related risks. RBI had also issued a circular on April 6, 2018, prohibiting its regulated entities to deal in virtual currencies (VCs) or provide services for facilitating any person or entity in dealing with or settling VCs,” Sitharaman replied.
“Cryptocurrencies are borderless and require international collaboration to prevent regulatory arbitrage. Therefore, any legislation for regulation or for banning can be effective only after significant international collaboration on evaluating the risks and benefits and evolution of common taxonomy and standards,” she said.
The Reserve Bank has repeatedly warned against the macroeconomic effects of cryptocurrencies and pointed out their problems while questioning their underlying fundamentals. The central bank’s governor has even called cryptocurrencies a “real danger” in the RBI’s annual report. Sitharaman informed the monsoon session of the Parliament that the RBI has recommended framing legislation on cryptocurrencies and opined that they should be banned.