India needs global collaboration to decide future of crypto, says finance minister

India's finance minister has reiterated RBI's stance on the crypto market, saying it is driven by speculation.< /p> New

Indian Finance Minister Nirmala Sitharaman has called for global collaboration on cryptocurrencies, assessing their pros and cons to form a common standard and taxonomy.

Responding to a question about cryptocurrency at the Lok Sabha, India's lower house of parliament, Sitharaman said India's central bank had advised the government to ban the use of cryptocurrencies as it poses a risk to financial stability. However, the government is looking for a comprehensive approach. She said:

"Any regulatory or prohibition legislation can only be effective after significant international collaboration on the assessment of risks and benefits and the evolution of a common taxonomy and standards."

She also reiterated that the Indian central bank's stance on the value of crypto is based on speculation. She added that “the value of fiat currencies is anchored by monetary policy and their status as legal tender. However, the value of cryptocurrencies is based solely on speculation and expectations of high returns that are not well anchored."

Reserve Bank of India (RBI), India's central bank, has maintained an anti-crypto stance since 2013, issuing multiple advisories against investing in digital assets and even banning banks from offering business services of crypto in 2018. The banking ban was eventually overturned after a Supreme Court ruling in 2020.

While the Indian government has yet to decide whether to go ahead with a ban or regulate the nascent crypto sector, the government has been relatively quick to propose and implement two tax laws on cryptography that have wreaked havoc o...