The chairman of the Parliamentary Standing Committee on Finance in India explained that the cryptocurrency legislation to be introduced in the country would be ‘distinct and unique. He went on to say that their goal was to balance growth and stability, but they were fully aware of the importance of cryptocurrencies. Belonging to the ruling Bharatiya Janata Party, lawmaker Jayant Sinha talked about the crypto legislation in India at an event that was organized on Wednesday by the Blockchain and Crypto Assets Council (BACC) that belongs to the Internet and Mobile Association of India (IAMAI).
Sinha is part of the Parliamentary Standing Committee of Finance and serves as its chairman. He elaborated that it just wasn’t possible for India to adopt the crypto policies that are used in advanced economies because full capital account convertibility is still not possible in the country. He clarified that the crypto policies that Indians would adopt would be different from that of Japan, the United States, or El Salvador, which just last week made Bitcoin legal tender. As per the lawmaker, they would have to come up with a distinct and unique solution primarily because of their unique circumstances. He went on to say that balancing growth and stability was important, but this doesn’t mean that they were not aware of the importance of crypto.
He went on to note that the committee would also consider crypto legislation while keeping national security in mind as well. The chairman said that they had to be extremely watchful of cryptocurrencies and these crypto-assets because it is possible to use these crypto instruments for domestic security threats and terror financing. R. Gandhi, Reserve Bank of India’s (RBI) former deputy governor, said that cryptocurrencies had to be regulated as a commodity or as an asset in the country and had to be governed by the existing law.
He added that once these digital currencies were accepted, then the rules applicable to commodity exchanges would be applicable to them as well, which means coins can be used to pay for goods and services. This would mean that people would have the freedom to start buying, selling as well as holding digital assets. A recent report had also disclosed that the Indian government does have plans of regulating crypto assets the same way as commodities and also by their use cases as well.
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Previously, there had been reports that the Indian government was going to impose a complete ban on cryptocurrencies, such as Bitcoin, and would only permit central bank digital currencies (CBDCs) to be issued by the Reserve Bank of India (RBI). Meanwhile, the central bank does have plans of issuing a digital model of the rupee by the end of this year. Like other countries, it is also working on its own digital currency to counter the dominance of cryptocurrencies in the existing financial system. Central banks will need to keep up if they want to maintain the role they play in this system in the future.