India to have state-issued cryptocurrency, but banned private cryptos

India – India is all set to have its state-issued digital cryptocurrency soon as cryptos witness a global surge. The Union Finance Ministry has announced that soon it will launch a cryptocurrency issued by the government, but all private cryptocurrencies in India would be banned.

India has still not recognized private cryptos as a legal coin or tender in the country, citing which VHP leader Girish Bharadwaj had sought a ban on them for alleged use in funding terrorism, drugs, and anti-national activities. In this context, Union Dy Director (Currency) Sanju Yadav said in a letter to the VHP leader, “Inter-ministerial committee (IMC) constituted under the chairmanship of secretary economic affairs to study the issues related to virtual currencies (VCs) and propose specifications to be taken in this matter recommended in its report that all private cryptocurrencies except any cryptocurrency issued by the State, be prohibited in India.

Further, the committee was of the view that it would be advisable to have an open mind regarding the introduction of an official digital currency in India. The government would take a decision on the recommendation of the IMC and the legislative proposal, if any, would be introduced in the parliament following the process.”

‘CryptoFinance: Opportunities and Challenges, was vividly discussed on Monday in a meeting between Parliamentary Standing Committee on Finance and industry associations and experts. The meeting concluded that cryptocurrency can’t be stopped but must rather be regulated. In this direction, the government is now planning to regulate cryptos and bring them under the tax structure of the Centre.

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Speaking at Sydney Dialogue, a forum on emerging cybertechnologies, Prime Minister Narendra Modi noted that nations must come together and work on cryptocurrency ensuring it “does not end up in the wrong hands”. Highlighting how technology is largely becoming a new weapon, against which world democracies must work and cooperate for governance and regulation. He said, “Take cryptocurrency or Bitcoin, for example. It is important that all democratic nations work together on this and ensure it does not end up in wrong hands, which can spoil our youth.”

PM Modi added about Digital Age, “It is raising new questions on sovereignty, governance, ethics, law, rights and security. It is reshaping international competition, power, and leadership.”  

RBI chief Shaktikanta Das has also said that India must hold deep discussions on cryptocurrencies. “When the central bank says that we have serious concerns from the point of view of macroeconomic and financial stability, there are far deeper issues involved. I’m yet to see serious, well-informed discussions in the public space on these issues.”

India, at present, has two crypto unicorns namely CoinSwitch Kuber and CoinDCX.