Indian Minister Says No Issue With Crypto if Laws Are Followed

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Ruholamin Haqshanas

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Ruholamin Haqshanas

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Ruholamin Haqshanas is a contributing crypto writer for CryptoNews. He is a crypto and finance journalist with over four years of experience. Ruholamin has been featured in several high-profile crypto...

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June 26, 2023 06:55 EDT

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Rajeev Chandrasekhar, India’s Minister of Information Technology, has said crypto would face no issue within the country if related laws are followed. 

Speaking at an event in the southern city of Bengaluru, Chandrasekhar said there is “nothing today that outlaws crypto as long as you follow the legal process.” The remarks come just days after the country’s central bank advised investors to stay away from crypto.

The Reserve Bank of India (RBI) has long maintained a harsh stance toward digital assets, arguing that the nascent asset class has no underlying value. The central bank has constantly warned investors and the government against crypto, citing volatility as well as risks of fraud and scams. 

Just last week, India’s central bank governor Shaktikanta Das said cryptocurrencies don’t have any intrinsic value and their perceived “value is nothing but make-believe.” He said cryptos are not even worth a tulip, alluding to the well-known Dutch tulip mania blow-up in the early part of the past century.

“Every asset, every financial product has to have some underlying (value) but in the case of crypto there is no underlying… not even a tulip…and the increase in the market price of cryptos, is based on make-believe.”

India, which currently holds the G20 presidency, also plans to use this opportunity to coordinate global crypto regulation. As reported, India’s federal economic affairs secretary Ajay Seth said in December last year that the G20 countries will study the implications of cryptocurrencies for the economy, monetary policy, and the banking sector in order to inform a policy consensus.

On the other hand, the country’s central bank has been a supporter of Central Bank Digital Currencies (CBDCs), calling them “the future of money.” India started a pilot program of its digital currency in cooperation with nine banks in November last year. 

It is worth noting that India’s controversial crypto tax plans, which include a 30% tax on income from cryptocurrencies as well as a 1% tax deduction at source (TDS) at the time of payment of a crypto transfer, have adversely impacted trading volumes on local cryptocurrency exchanges.

According to a research study by Esya Centre, a Delhi-based technology policy think tank, Indian crypto traders have moved over $3.8 billion in trading volume from local exchanges to international crypto platforms after the country’s controversial tax policy came into effect.

“Of this, cumulative volume of $3,055 million was offshored within six months of the current financial year,” the report said, adding that “an estimated 17 lakh users switched” from domestic crypto exchanges to foreign counterparts over the past year.