Financial technology (fintech) firms depend on blockchain, the backbone of cryptocurrencies, and they should have a window available. Finance minister Nirmala Sitharaman
has made it clear that there will not be a complete ban on cryptocurrencies or at least the technology part of it.
“From our side, we are very clear that we are not shutting all options. We will allow certain windows for people to do experiments on blockchain, bitcoins or cryptocurrency,” Sitharaman had said at an India Today conclave.
She said fintech depends on such experiments and it will have that window available. “We are not going to shut it off,” she said.
But it is the Cabinet note which will detail the kind of formulation, she said, adding the note will get ready soon. “It is nearing completion, and then it will be taken to the Cabinet. The Supreme Court had commented on cryptocurrency.
We are very clear that the Reserve Bank of India
(RBI) will take a call on an official cryptocurrency,” she said.
technology, she said it is a big area and India has a lead advantage in it. “A lot of fintech companies have made a lot of progress on it. We have got several presentations. Much work at the state level is happening. And, we want to take it in a big way in IFSC
or Gift City in Gandhinagar,” the FM said.
She said the ministry is planning to have a start-up meet essentially on fintech in Gift City. “Once Parliament is over, I will probably spend more time executing and planning that. On fintech and blockchain, there is a lot of work going on in India and we will certainly encourage that,” the FM said.
Earlier, MoS for finance Anurag Thakur had said in Parliament that there are different definitions for cryptocurrencies or virtual currencies the world over. The inter-ministerial committee (IMC), headed by former finance secretary Subhash Chandra Garg, had first suggested a draft Bill to ban cryptocurrencies. “The government will take a decision on recommendations of the IMC,” Sitharaman had said in a written response to a question in Parliament.
Existing laws are inadequate to deal with the subject, Thakur had said. The government formed the IMC, and it has furnished its report, he said, adding there was also a meeting of an empowered technology group, which took place earlier.
Thakur said the committee of secretaries, chaired by the Cabinet secretary, has also given its report, and the Bill is being finalised. It will be sent to the Cabinet soon.
The SC, in March 2020, had struck down the RBI’s instructions on banks to stop providing services to crypto trading platforms, leading to uncertainty about the status of virtual currencies in India.
The new legislation will clear the government’s stand on cryptocurrencies.