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India is readying itself for a major revision of its cryptocurrency policies. In this regard, it has been approached by officials of many governments who have informed the Indian government about possible global risks associated with digital currencies.
India’s finance minister, Nirmala Sitharaman, noted positively that all nations who have raised red flags over the onslaught of digital currencies are in fact following in India’s steps to tread cautiously against cryptocurrencies.
When asked to comment on Facebook’s Libra, which was the hot topic of the G20 debate regarding cryptocurrencies, the Indian finance minister revealed little but cautioned that no nation should consider rushing towards cryptocurrencies.
Facebook’s Libra is facing major backlash by many governments and financial watchdogs globally which are consistently pointing on fundamental security and economic risks tied to these new digital currencies.
These concerns are generalized over all cryptocurrencies but since Facebook’s Libra is poised to rise out as a major digital currency that will eventually be tied to dozen national currencies and government securities, experts predict that any failure in its operation can launch a major economic crisis globally. Therefore, many financial leaders around the world are demanding that Facebook address these concerns or else be denied the certification by the regulatory authorities to launch Libra.
India’s Finance Minister Sitharaman, who has recently returned from the G20 meeting, apprised Indian think tank groups about the shared global perspective that was voiced in unity at the G20 summit: intensify the scrutiny of cryptocurrencies and any failure to do so should immediately result in banning these digital currencies.
Why So Anti-Crypto?
Two major reasons that have formed the rationale of the argument against cryptocurrencies are the possibility of terrorist funding and money laundering that cannot be traced back to the source. By its very nature, blockchain-backed digital currencies, while offering unmatched convenience in transactions, are also notorious for mystifying the source and destination of the transactions for anyone trying to establish the money trail.
Additionally, with digital currencies like Facebook’s Libra that are pegged to various real-world financial commodities like national currencies, the stakes are even higher.
Currently, India is planning a ban on cryptocurrency and other crypto assets in a draft bill and is looking to pass “Banning of Cryptocurrency and Regulations of Official Digital Currency Bill, 2019.” The bill mandates that the holders of digital currencies declare and dispose their digital money within 3 months after the bill is passed.