Cryptic signals on cryptocurrencies
Cryptocurrencies have become a headache for policymakers across the world. The same is true about the government of India, which has not been able to make up its mind on how to tackle the growing popularity of unregulated digital currencies. Whatever signals it has given so far smack of the government’s cluelessness about the issue. While the country’s central bank has been very clear on its stand on cryptocurrencies—time and again it has said these digital currencies are a threat to the nation’s financial stability—the government, though, seems to be not so sure. While it is mindful of the fact that cryptocurrencies could be used for money laundering and terror financing, it is not ready to go for a blanket ban on cryptos.
The issue of regulations of cryptocurrencies has reached the high offices with the prime minister himself chairing a meeting last Saturday to discuss it. The message coming out from that meeting is that the Centre is looking for a middle path on the issue. It has said that any step that it takes would be ‘progressive’ and ‘forward-looking’. Clearly, the government is unlikely to ban cryptocurrencies as it believes digital currencies are evolving technology with many positive utilities in future.
It might be mindful of the fact that many countries in the world are slowly giving legitimacy to these currencies, which are based on the much talked-about blockchain technology. The US now has a Bitcoin Futures ETF trading on exchanges; El Salvador has even allowed bitcoin as a legal tender. The Centre may not go for an outright ban, instead it would look to bring in limited restrictions on the sale and promotion of cryptocurrencies. Saturday’s meeting also discussed the aggressive advertising by crypto exchanges that is ‘misleading’ the nation’s youth.The question, though, is to what extent the government may like to rein in digital currencies without hurting millions of enterprising investors who have already bet on them. The much-awaited cryptocurrency bill likely to be tabled in the Winter Session of Parliament may have some answers.