India's Finance Minister says the country may ban cryptocurrencies

According to Nirmala Sitharaman, the central bank is concerned about the “destabilizing effect of cryptocurrencies on the monetary and fiscal stability”

18.07.2022 - 14:30

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What’s new? The Reserve Bank of India (RBI) is keen to ban the use of cryptocurrencies in the country because it is concerned about their “destabilizing effect on the monetary and fiscal stability.” Nirmala Sitharaman, India's finance minister, made the announcement in a speech to members of Parliament. She added that regulating or banning digital assets would require international cooperation.

Sitharaman's speech

What else does the minister say? Sitharaman explained that “cryptocurrencies are by definition borderless,” and therefore, to introduce appropriate legislation, it is necessary to determine their classification, as well as to assess the risks and benefits of their use in cooperation with regulators in other countries.

In March, Sitharaman said the Finance Ministry was consulting with the RBI on the creation of a central bank digital currency (CBDC). She noted that the digital rupee has several advantages over fiat in international settlements.

In three months, trading volume on India's largest cryptocurrency exchanges fell 72,5% on average. On April 1, India enacted a 30% tax on profits from digital asset transactions, as well as a 1% tax deducted at source (TDS). In May, cryptocurrency exchange Coinbase stopped operations in India, citing “soft pressure” from the RBI.

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