On Saturday, Prime Minister Narendra Modi held a discussion on the future for cryptocurrency, which is enormously booming in India. As more Indians gravitate toward cryptocurrency investments, it was essential to have an official meeting to discuss these cryptocurrencies’ risks. The pivot of the discussion revolved around initiating progressive and forward-looking measures to ensure that rampant exposure to the cryptocurrency does not lead to terror funding and money laundering.
Until now, the central government had not taken a firm stand about the legitimacy and future for cryptocurrency in India. The finance minister Nirmala Sitharaman, during an interview to a leading news portal, had asserted that the central government was looking positively towards adopting modern blockchain technology. The central government was willing to allow a specific time frame for cryptocurrency investors to test its viability in the country.
Nirmala Sitharaman’s statement provided some relief to the native cryptocurrency enthusiasts. However, the future for cryptocurrency was still under the blanket. Prime Minister Narendra Modi’s meeting resulted from RBI Governor Shaktikant Das’ alarming statements about the cryptocurrency and threats related to them. Shaktikant Das, who was recently reappointed as the Governor Of the Reserve Bank of India, raised questions about the legitimacy of cryptocurrency. Furthermore, he alleged that cryptocurrencies are vicious allures used to catch the public interest and eventually amass billions of dollars from investments. He cited the finding of a research group that says a minimum of 7.9 percent of Indians have invested $10 billion in digital currencies, despite the fact that the figures were wildly overblown.
Why Is The Reserve Bank of India Not In The Favor Of Cryptocurrency?
The Reserve Bank of India, since the beginning, has always taken a bitter stance against the thriving cryptocurrency in India. Cryptocurrencies operate on the blockchain that uses peer-to-peer computer network spread worldwide. Being completely virtual, the Reserve Bank of India can not bring these cryptocurrencies under its control, which means there will be no authority scrutinizing the crypto transactions. This loophole can facilitate undeniable opportunities to fund unlawful activities, money laundering, and tax evasion.
The Reserve Bank of India might have considered cryptocurrency a severe threat with no immediate solution. Thus, the top bank of India decided to impose a ban on crypto trading within the realm of India back in 2018. However, the Supreme Court of India reinstated the restrictions imposed on cryptocurrency in March 2020.
There have been proposals in India to adopt stronger laws for virtual coin transactions, arguing that an uncontrolled environment might drive more domestic savings into the asset class, putting family savings at risk.
The Reserve Bank of India is still skeptical about the future for cryptocurrency. Nevertheless, reports suggested that the reserve bank might develop its digital currency. If so, the new offering from the bank may quench the large population fascinated with virtual currencies.
Undertakings Of PM Modi Led Meeting On The Future For Cryptocurrency
According to several reports on PM Modi’s meeting on Saturday, the central government would closely scrutinize cryptocurrencies because it is developing technology and will take necessary actions.
As cryptocurrencies are gaining momentum in the country, the Centre Government is bound to draft rules and regulations to regulate the virtual currency sector. It is said that a parliamentary finance committee is looking forward to conducting a discussion with prominent crypto sector players on Monday about the viability and future for cryptocurrency.
The purported meeting will comprise participants from leading crypto exchanges, members of the Blockchain and Crypto Assets Council (BACC), and others who are expected to attend the conference, which is scheduled to take place behind closed doors.
This urgency in dealing with the cryptocurrency issue stems from the fact that Indians are making unprecedented investments into the virtual currency market. According to statistics, Indians had approximately $6.6 billion infused in cryptocurrencies as of May this year, compared to $923 million in April 2020.
In terms of cryptocurrency adoption, India is ranked second on the Global Crypto Adoption Index. According to reports, the entire investment was expected to surpass $10 billion in the first week of November.
The participants of the PM Modi-led meeting also unanimously agreed that attempts to deceive the country’s younger generation by over-promising and non-transparent advertising should be controlled. They also decided that uncontrolled crypto markets should not be permitted to become conduits for money laundering and terror financing.
The meeting also discussed the best practices to mold the unregulated cryptocurrency into a controlled and safe environment. The central government may submit a crypto law to the cabinet for consideration.