Nirmala Sitharaman, the Minister of Finance for the Indian government, is unsure whether or not blockchain technology can be utilized for assets that may be traded. During this time, Indian is working toward achieving global regulation cooperation and making headway with its digital rupee CBDC.
Nirmala Sitharaman, India’s Minister of Finance, has said that the government does not feel comfortable using blockchain technology for assets that may be traded. Sitharaman made the remarks when she was visiting the United States for a trip that would include her attendance at the Annual Meeting of the International Monetary Fund (IMF) and the World Bank, and the meeting of the G20 Finance Ministers and Central Bank Governors (FMCBG).
The Minister of Finance is pleased to enable the technology to be utilized for various applications because she wants the financial technology industry in the nation to be successful. On the other hand, she was quite adamant about the fact that, in her opinion, it would lead to inappropriate use of technology.
Sitharaman stated,
“But if it is a question of platforms, i.e., trading on assets which have been created, and for buying and selling, and making profits, are we in a position to establish for what purpose it’s being used? Are all the countries in a position to understand the money trade?”
She further stated that there would need to be international collaboration on the issue of regulation, which she considers vital. She believes that this is the case. She elucidated that India will indeed have crypto rules and that the country would work with the G20, the World Bank, and others to tackle the issue.
Meanwhile, people working in the field have replied to the statements, claiming that regulating cryptocurrencies will assist in encouraging innovation. Others observed that the economics Sitharaman condemned were essential to technology.
Regulations That Are Currently Being Implemented
At the forthcoming summit of the G20, India will be debating crypto legislation, but government officials are already prepared for the possibility of a shakeup in the rules. It is possible that the government would implement its Goods and Services Tax (GST) on the asset class. If this happens, it will be added to India’s already onerous tax structure for cryptocurrencies. There is no certainty on this, and the tax might be anywhere from 18 to 22% of the purchase price.
Additionally, India has said it would decide definitively on the legal status of cryptocurrencies within the first three months of 2023. It has until the end of May to respond to the Financial Action Task Force (FATF); meanwhile, it is working to overcome some of the challenges associated with monitoring the market.
The people moving their money overseas to purchase real estate are another target of the government’s investigation. In recent months, residents of India have begun making purchases of real estate in Dubai using cryptocurrency, which is widely accepted across the city. The government has said that this constitutes a violation of laws and that there may be implications due to this violation.
Taking Into Consideration the Possibilities of CBDC and Blockchain Technology
India has shown a significant amount of interest in blockchain technology itself. Polygon powered the first police report on the blockchain, which allowed users to register complaints against the police without fear of dismissal or manipulation.
At a recent conference, Sitharaman expressed her optimism about the future of blockchain technology by predicting that it would see a growth of 46% over the next five years. She predicted that more and more banking activities would be conducted online. India intends to use this technology across various sectors, including the medical, financial, and judicial sectors.
Until then, the nation is also focusing on developing its own CBDC. A concept note about the digital rupee was only just made public by the Reserve Bank of India. Shortly, a pilot project for the Indian CBDC will get underway.
