- Cryptocurrencies are by nature borderless and need international cooperation to avoid financial trading, said Finance Minister Nirmala Sitharaman.
- BuyUcoin CEO, Shivam Thakral comes in support of the Minister’s statement about global collaboration.
- Many talents have left the country, and an increasing number of local entrepreneurs are creating products for international markets rather than serving Indian consumers.
The Reserve Bank of India supports the country’s ban on cryptocurrencies, but Nirmala Sitharaman, the finance minister, believes that for the ban to be effective, there needs to be international cooperation. The RBI has raised concerns about the unstable influence of cryptocurrencies on the economic and financial stability of a country. As per the advice of India’s Minister of Finance Nirmala Sitharaman, cryptocurrencies are framing the legislation in this sector.
The RBI believes that cryptocurrencies should be illegal, as the Finance Minister wrote in response to a question in the Lok Sabha. Since cryptocurrencies are by nature borderless, international cooperation is necessary to prevent regulatory trading. The development of a uniform taxonomy and standards, as well as major international collaboration on risk and benefit assessment, are all necessary before any law for regulation or for banning can be effective.
There have been several comments on FM Sitamram’s statements, amongst which the BuyUcoin Man comes up with a reply to support her. “We have always reiterated the fact that we need a global framework for regulating the crypto and blockchain industry. We support our Finance Minister in her efforts to seek global coordination for regulating crypto as it is a positive step taken in the right direction,” said Shivam Thakral, CEO, BuyUcoin, India’s Most Secure Crypto Exchange.
A cryptocurrency, also known as a cryptocurrency or crypto, is a type of digital currency that performs as a means of an exchange over a computer network and is not supported or maintained by any one central organization, such as a bank or government. It is an alternate payment method developed with the help of encryption techniques. By utilizing encryption technology, cryptocurrencies can act as both a medium of exchange and a virtual accounting system.
The RBI forbade its regulated organizations in 2018 from transacting in virtual currencies or any services to assist any individual or entity in transacting in or settling VCs. On March 4, 2020, the Supreme Court overturned the RBI’s decision.
The RBI instructed its regulated entities to continue conducting customer due diligence procedures for transactions in venture capital (VC) in line with the guidelines governing criteria for Know Your Customer (KYC), Anti-Money Laundering (AML), Combating of Financing of Terrorism (CFT), responsibilities under Prevention of Money Laundering Act (PMLA), 2002, etc., in terms of ensuring compliance with pertinent provisions under Foreign Exchange Management A.
At a banking conference, RBI deputy governor Rabi Sankar stated that cryptocurrencies were “specifically developed to bypass the regulated financial system” and aren’t supported by any actual cash flow. In addition, he stated, “we have shown that cryptocurrencies are not accessible to the description as a currency, asset, or product; they have no real cash flows, they have no economic value; that they are similar to Ponzi schemes, and could even be worse.”
“Crypto/Blockchain is a global phenomenon and it will be difficult to regulate the crypto industry based on isolated policies by various countries. There is an urgent need to create a homogeneous global framework for crypto regulation. The international collaboration on the evaluation of risks and benefits is going to be hard because there are countries who already implemented policies to regulate cryptocurrencies and have a better understanding,” said Tarusha Mittal, COO, and Co-founder of UniFarm, a platform that combines a multi-token reward staking technology with cooperative wealth creation.
India’s decision to tax cryptocurrency trading activities and profits earlier this year was interpreted as a sign that the country’s central bank was starting to accept the quickly developing new technology. The industry’s players, meanwhile, have received contradictory signals from Indian banks in recent months. According to those with knowledge of the situation, the RBI continues to restrict Indian banks from cooperating with cryptocurrency platforms, which has made on-ramp difficult for the companies.
Where brilliant Indian minds are working abroad, our country is at the stake of saving its talent by making an important decision regarding cryptocurrency and its legal use. Will the Indian banks cooperate with cryptocurrency platforms in the near future? The time will tell us.