Recently, the Reserve Bank of India declared its stance on digital assets—imposing an explicit prohibition. But the Finance Minister said they would need global support to implement such a prohibition on cryptocurrencies.
The queries concerning digital assets were addressed in the Lok Sabha’s monsoon session, where Nirmala Sitharaman, the Finance Minister of India, gave the verdict on all types of digital assets. According to Sitharaman’s statement, cryptocurrencies are borderless and international cooperation is required for their prevention.
Therefore, passing any law or legislation concerned with digital assets will be effective only with significant collaboration from international entities and after evaluating the benefits and risks of common standards and taxonomy.
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An insight into RBI’s stance regarding cryptocurrency:
We have repeatedly witnessed the RBI questioning the fundamental use of cryptocurrency and the problems associated with the introduction of digital assets. Shaktikanta Das, the governor of the RBI, has on record addressed the real danger associated with cryptocurrency legalisation in the Central Bank’s annual report.
On the 30th of June, 2022, the 25th issue of FSR (Financial Stability Report) was released. The foreword suggested that Das is concerned about the increase in currency digitization, which would demand special attention to cyber crimes.
Das further continued by stating that we must keep in mind the emerging risks associated with shifting to the digital platform completely. According to the governor of the RBI, cryptocurrency could be declared dangerous because -anything based on make-believe values, without any underlying cause, is a matter of speculation under a fancy name.