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India formulating opinion on cryptocurrencies

Dubai - Country 'must always evaluate, explore and encourage new ideas with an open mind': Minister

Contrary to reports of India banning the trading of cryptocurrrencies that were making rounds prior to the budget for 2021-22, Finance Minister Nirmala Sitharaman said the government is still formulating its opinion on this and will take a calibrated position.

Indian media reports on Saturday quoted Union Minister Anurag Thakur saying the government is open to evaluate and explore new technologies, including cryptocurrencies, for improving governance.

Prime Minister Narendra Modi himself is a strong advocate of embracing technology in various aspects of governance, the Minister of State for Finance said while addressing an event organised by Entrepreneurs’ Organisation – EO Punjab.

“Let me say that we welcome innovation and new technology... blockchain is a new emerging technology. Cryptocurrency is a form of virtual currency. I firmly believe that we must always evaluate, explore and encourage new ideas with an open mind,” he said.

A high-level inter-ministerial committee (IMC) was constituted under the chairmanship of the economic affairs secretary on digital currencies and it has submitted its report. The government would take a decision on the recommendations of the IMC and the legislative proposal, if any, would be introduced in parliament following due process, he said while inviting suggestions and views on the issue.

Cryptocurrencies are digital or virtual currencies in which encryption techniques are used to regulate the generation of their units and verify the transfer of funds, operating independently of a central bank.

Ashish Mehta, co-founder at Digitx, said: “It is a very positive stance and promises a lot of clarity about how we can expect things to go ahead. The main and prime point of deliberation is how we classify this as currency, asset or service, or any other instrument. A lot could be avoided if it is accepted as what it is and not tried to force-fit it into existing definitions or may be just create a new definition."

"These are self-regulated systems that add certain bespoke value to the society. In order to let the system run and work there are native rewards which are generated and distributed by and within the system micro-environment for positive work done. These rewards need to be valued against existing value systems in the society through designated platforms like exchanges.”

Gaurav Dahake, CEO of Bitbns, added: “There have been positive developments around crypto. Ministry officials are taking a judicious approach to create a inclusive regulatory framework. With the recent global developments the Indian government is of the opinion that a unilateral view of restricting it is not going to help considering India is at the forefront of the fintech ecosytem. The industry is optimistic with the stance taken and would love to initiate dialogue with the government to resolve any issues.”

With inputs from PTI

— sandhya@khaleejtimes.com