- Finance Minister Nirmala Sitharaman’s firm stance on cryptocurrencies, emphasizing that they should not be considered as currencies but rather as assets primarily used for trading and speculation.
- Sitharaman’s perspective reflects a cautious approach towards digital assets, acknowledging their potential impact on financial markets and cross-border transactions.
With regard to Bitcoin (BTC) and other digital assets, Indian Finance Minister Nirmala Sitharaman has adopted a strong stance, stressing that they should not be regarded as currencies.
Sitharaman states that she anticipates a cryptocurrency regulatory framework to be drafted by the G20, an intergovernmental organization made up of 19 sovereign nations, the EU, and the AU.
Sitharaman further emphasized that rather than acting as conventional currencies issued by central banks, crypto assets are mostly used for trading, speculation, and profit-making activities.
Sitharaman went on to highlight how trading and speculation are the lifeblood of bitcoin assets.
Sitharaman contends that because of the potential impact of cryptocurrencies on cross-border transfers and illegal activities like drug trafficking and terrorism, the lack of regulatory safeguards has global ramifications.
As of 2024, cryptocurrency regulation in India remains a nuanced landscape. While virtual digital assets (VDAs) are not expressly regulated as legal tender, individuals and entities are permitted to hold, invest in, and transact with them within the bounds of existing laws.
The 2020 Supreme Court of India judgment acknowledged the dual nature of VDAs, recognizing their ability to function similarly to real currency despite lacking legal tender status. Despite this recognition, the Indian government has not endorsed cryptocurrencies as legal tender or coin, emphasizing the intention to curb their use in financing illicit activities or within the payment system.
The regulatory approach pivots on adherence to established due diligence processes by banks and other Reserve Bank of India (RBI)-regulated entities, with no specific legislation governing VDAs as of now. This regulatory ambiguity underscores the necessity for the development of suitable regulatory mechanisms in line with evolving global understandings of cryptocurrencies.
Disclaimer : This article was created for informational purposes only and should not be taken as investment advice. An asset’s past performance does not predict its future returns. Before making an investment, please conduct your own research, as digital assets like cryptocurrencies are highly risky and volatile financial instruments.
