The government will take a balanced view on the issue of regulation of cryptocurrencies as they have implications on the country’s financial stability, Principal Economic Adviser Sanjeev Sanyal said on Monday.
Currently, there are no particular regulations or any ban on use of cryptocurrency in the country.
The issue of cryptocurrency has not been covered in the Economic Survey 2021-22, Sanyal said in an interaction with media on the Survey tabled in Parliament by Finance Minister Nirmala Sitharaman earlier in the day.
“As you know, this is a matter of some debate, both inside the government, in the Ministry of Finance, and even in Parliament. So, this is something that is currently in discussion,” he said.
The Reserve Bank has also highlighted various issues, including financial stability impact of such virtual currencies.
“There are some financial stability issues. But there are also other arguments that are made in terms of innovation and so on….obviously a balanced view on this will be taken,” he said.
The government had expressed its intention to bring a bill on cryptocurrency seeking to “create a facilitative framework for the creation of the official digital currency to be issued by the Reserve Bank of India” in the last session of Parliament.
However, it could not be introduced as the Cabinet had not cleared the draft bill.
In November, Prime Minister Narendra Modi held a meeting on cryptocurrencies with senior officials, and indications were that strong regulatory steps could be taken on the matter.
There have been a rising number of advertisements, featuring even film stars, promising easy and high returns on investments in cryptocurrencies in recent times, amid concerns over such currencies being allegedly used for luring investors with misleading claims.
The Parliamentary Standing Committee on Finance, chaired by BJP member Jayant Sinha, had also met the representatives of crypto exchanges, Blockchain and Crypto Assets Council (BACC), among others, and arrived at a conclusion that cryptocurrencies should not be banned in the country but should be regulated.
The RBI has repeatedly reiterated its strong views against cryptocurrencies, saying they pose serious threats to the macroeconomic and financial stability of the country and also doubted the number of investors trading them and their claimed market value.
RBI Governor Shaktikanta Das too had earlier this month reiterated his views against allowing cryptocurrencies, saying they are a serious threat to any financial system since they are unregulated by central banks.