India hates Bitcoin and cryptocurrencies … but thinks about its central bank money

Regulatory winter in India – As the country’s parliament is set to tackle the regulation of cryptocurrencies and central bank digital currencies (MNBC) soon, this politician hopes that future issuance of central bank digital currencies will eventually crush “private” cryptocurrencies.

India and cryptocurrencies: MNBCs to fight against bitcoin and altcoins

On October 22, 2021, former Indian Finance Secretary Subhash Chandra Garg told the Business Standard Insight Out Summit that private cryptocurrencies will be useless if more central banks launch their digital currencies. In particular, he believes that governments do not benefit from the benefits generated by cryptocurrencies:

“Private cryptocurrencies hurt government revenue in a way… the return on investment that cryptocurrency platforms can make from the currency delivered to them does not accrue to the government. Once official digital currencies arrive, most private cryptos and stablecoins will be gone. “

This is not the first time that Indian authorities have displayed their distrust of cryptocurrencies. In 2018, India’s central bank even banned banks from engaging in cryptocurrency-related transactions. The Supreme Court finally overturned this decision in 2020.

A crypto bill on the menu of the Indian Parliament: old laws to be revised

The Indian Parliament is expected to consider the Cryptocurrency Bill 2021 and the regulation of official digital currencies during the winter session. Finance Minister Nirmala Sitharaman spoke of the need to be careful with cryptocurrencies. While she still has to weigh the pros and cons of cryptocurrency, the minister is a natural supporter of central bank digital currencies.

India does not like cryptocurrencies

As for Mr. Garg, despite his reluctance to use cryptocurrencies, the country’s former finance secretary nonetheless supports a proposal for regulatory change that would be based on the traditional framework for securities in the country. Garg also suggests the incorporation of blockchain-based smart contracts into the Indian Contract Act of 1872.

The Indian authorities are moving hesitantly towards adopting regulations aimed at controlling the risks associated with cryptocurrencies, but without hampering their development. This hesitation contrasts with the country’s investor appetite for cryptocurrencies, with data from Chainalysis indicating a boom in cryptocurrency investments in India in 2020.

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