India Will Have A Window For Crypto, Blockchain Experiments: FM Sitharaman

Finance minister Nirmala Sitharaman has reiterated the government’s stance on allowing a window for experiments in Bitcoin, blockchain and cryptocurrency, and suggested that a blanket ban may not be instituted on these new-age financial technologies.

Sitharaman said that while the Reserve Bank of India will take a call on an official cryptocurrency, while the Supreme Court has already spoken on the matter in its ruling last year, reallowing bank transactions for cyrptocurrency trade.

Speaking at a media event on Saturday (March 13, 2021), Sitharaman said that a cabinet note is getting prepared on the matter, and added, “From our side, we are clear that we are not shutting all options off. We will allow a certain amount of — a window for people to use — so that experiments in the blockchain, bitcoin or cryptocurrency experiments, and fintech which depends on such experiments will have that window available for them. We are not going to shut it off all. Yet, what kind of a formulation, even for crypto, will have to be the content of the cabinet note, which will get ready soon.”

Earlier this month, the FM had said that as the world moves fast with technology, India can’t look the other way. The FM added that in the fintech space, India led the way and many countries are looking to emulate India’s fintech-based developments.

In January, the Cryptocurrency and Regulation of Official Digital Currency Bill, 2021, was listed in the Lok Sabha bulletin. The bill has been slated for discussion and passing during the ongoing budget session of Parliament. The synopsis of the bill reads: “To create a facilitative framework for the creation of the official digital currency to be issued by the Reserve Bank of India. The bill also seeks to prohibit all private cryptocurrencies in India, however, it allows for certain exceptions to promote the underlying technology of cryptocurrency and its uses.”

Reports last month speculated that the government is looking to ban all ‘private’ cryptocurrencies such as Bitcoin and Ethereum, i.e. those not issued by the state. The reports had suggested that crypto investors would be given a three-months transition period to exit the space. Some reports had also suggested that the government may bring in the bill as an ordinance, thus bypassing the debate on the bill in Parliament.