India not against blockchain technology, says FM

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Nirmala Sitharaman

Nirmala Sitharaman, India’s finance minister, at an event in Bengaluru on Saturday. Image: NSitharamanOffice/Twitter

India is not against blockchain technology, but currencies need to be monitored by either the government or the central bank, Finance Minister Nirmala Sitharaman said on Saturday.

See related article: India imposes anti-money laundering regulations on crypto industry

Fast facts

  • “[Blockchain] gives us so many options. It can be used in so many different ways. So we are not against the technology, says Sitharaman so at an event in Bengaluru.
  • “But on currency, we think [it] must be run by either the government or the central bank. Otherwise, it could be like those that have collapsed, causing huge spillover effects around the world, like FTX, she said.
  • The Reserve Bank of India, the country’s central bank, has launched pilot trials for retail and wholesale central bank digital currencies. According to Sitharaman, the digital rupee aims to improve cross-border and bulk payments to minimize arbitrage losses.
  • India, the world’s most populous country, is aiming for a global consensus when it comes to regulating crypto-assets.
  • “Global order has become so interconnected that one country taking any steps to regulate cryptoassets will be ineffective because technology does not care about borders or boundaries,” Sitharaman so.
  • The South Asian nation is also looking to prepare students for cryptocurrency and artificial intelligence. It has announced the introduction of these subjects in certain curricula from the next academic year.
  • India has approached digital assets with caution. Sitharaman last year introduced a 30% flat tax on crypto income and a 1% tax deducted at source (TDS) on crypto trades above 10,000 Indian rupees (US$122).
  • India also does not allow crypto traders to offset losses against gains. It has imposed a penalty equal to TDS for non-deduction, interest at 15% annually for late payment, and even imprisonment up to six months.
  • India is currently the president of the Group of 20, an intergovernmental forum of the world’s largest economies, and has listed cryptocurrency and its regulation as one of the agendas for discussion.
  • See related article: Common regulatory framework for crypto comes under India’s G20 presidency, says finance minister

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