After a week packed with critical economic developments, the Indian Finance Minister Nirmala Sitharaman and the Governor of India’s central bank Shaktikanta Das said the two government bodies have 100% harmony on cryptocurrency policy.
India makes headlines over cryptocurrency
On February 1, Sitharaman presented her budget for 2022-23, which introduced a flat 30% tax on all income earned through crypto activities. She also announced the introduction of central bank digital currency (CBDC) from April 2022.
In his address to the Indian CBDC on February 3, Indian Prime Minister Narendra Modi emphasized the importance of strengthening the digital economy.
The Indian Finance Minister clarified in the discussion on February 11 that bringing crypto transactions into the tax net does not mean that the government has legalized such assets, contrary to rumours in the crypto community.
In her response, she noted that “whether to ban or not to ban will be determined after the consultations give me inputs. Would you rather I not tax and allow the profits to stay? In turn, I will tax since it is [the government’s] sovereign right,” she added.
In response to the Indian Finance Minister’s question, the central bank chief acknowledged that CBDC and cryptocurrencies are currently under discussion and awareness of each other’s sensitivities.
The RBI and Ministry are working harmoniously on cryptography and everything else, respecting each other’s jurisdictions and understanding each other’s priorities and what is in the interests of the nation. “There’s no turf war here,” Sitharaman said following RBI’s central board’s meeting.
When asked about the CBDC consultations, the RBI Governor Das said, “as with several other issues, this one is currently being discussed between the RBI and the Government.”The government discussed any points we had with us. Beyond that, I do not wish to elaborate further.”
As part of a first public appearance with the RBI Governor Shaktikanta Das on Monday, Indian Finance Minister Nirmala Sitharaman handled the contentious issue of cryptocurrency through the annual budget 2022-23.
In addition to their stance on cryptocurrency, the yellow roses on the dais, the predominantly yellow sari of the Indian Finance Minister, and the yellow facemask of the RBI Governor captured everyone’s attention. Yellow represents marriage and union in this part of the world.
It was a prudent move on Sitharaman’s part to separate RBI’s CBDC plans from the debate on crypto in her budget proposals. While she allowed the RBI to launch the CBDC, she included crypto activities. This was without explicitly saying whether digital assets such as bitcoin would be included.
In political terms, the government saw it as a well-thought-out move that helped it out of a difficult spot where crypto opinions had become highly polarized.
For many, it was also a rebuke to RBI Governor Rao, who has taken a strong stance against cryptocurrencies, declaring they have the capacity to destabilize the economy.
Both the Indian FM and the Governor of the RBI expressed complete harmony today.
