Discussion paper on crypto is ‘fairly ready’, says Govt

The government has proposed to issue a Digital Rupee, or Central Bank Digital Currency (CBDC), in the fiscal year 2022-23.

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Bitcoin ATM, El Salvador. The government has proposed to issue a Digital Rupee. Reuters file

The government is “fairly ready” with its consultation paper on cryptocurrencies and has consulted domestic as well as institutional stakeholders including the World Bank and the International Monetary Fund, Economic Affairs Secretary Ajay Seth said Monday. No country can take a position for or against cryptocurrencies in absence of a broad framework of regulations, he said.

“Our consultation paper is fairly ready. We have gone through a deep dive into this, consulted not just domestic stakeholders, institutional stakeholders but also organisations like IMF, World Bank, we have consulted them. So we hope that we will soon be in a position to finalise our consultation paper,” Seth said on the sidelines of the curtain raiser event of ‘Iconic Week’ as part of Azadi Ka Amrit Mahotsav to be conducted by the Finance Ministry.

“Simultaneously we are also beginning our work for some sort of global regulations as well about what role can India play…the countries which have chosen to prohibit, they can’t succeed unless there is a global consensus around that…on the other hand, if there is global consensus around regulations then it will be a broad framework of participation of all countries…the digital assets, whatever way we want to deal with those assets, there has to be a broad framework on it for which all economies/countries have to be together. No country can choose either of the positions. We need a global consensus on crypto regulation,” he added.

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The government has proposed to issue a Digital Rupee, or Central Bank Digital Currency (CBDC), in the fiscal year 2022-23. Additionally, the Budget also proposed imposing a tax of 30 per cent on virtual assets, in line with the Centre’s plans to have a fiat digital currency, while disallowing use of private virtual coins as legal tender.

While presenting the Union Budget, Finance Minister Nirmala Sitharaman had said the Digital Rupee would be issued by RBI using blockchain technology starting from the next financial year. In February, Reserve Bank of India Governor Shaktikanta Das had said cryptocurrencies were a big threat to the country’s financial and macroeconomic stability, and warned investors that cryptocurrencies do not have any underlying asset.