India’s finance minister acknowledged that the country had no intentions to recognize Bitcoin as a currency anytime soon. Even though the country is working on Bitcoin taxation, a government official indicated in parliament that the government does not collect Bitcoin transaction data.
India’s relationship with digital currencies is tumultuous, with the government issuing confusing signals recently about the regulatory path it would take. Prime Minister Narendra Modi recently presided over a meeting where top officials agreed to work on digital currency-friendly policies. Then came reports that Bitcoin would be banned as a payment mechanism but legalized as an asset.
Finance Minister Nirmala Sitharaman has now put an end to any expectations that the Indian digital currency industry had of employing digital assets for payment.
According to a local business publication Mint report, the finance minister spoke about digital currencies in parliament on Monday. “No, sir,” she said emphatically when asked if the government had any plans to recognize Bitcoin as a currency.
The Reserve Bank of India (RBI) is also rumored to be getting closer to deploying its digital rupee. According to the business journal Economic Times, the Lok Sabha, India’s lower house of parliament, was recently told of the plans.
According to reports, the RBI has also introduced a bill in parliament to change the Reserve Bank of India Act of 1934 to give the digital rupee legal status and expand its reach. China followed suit a year earlier, modifying its central banking regulation to say that “the Renminbi contains both a physical and a digital form.” The digital yuan gained legal status as a result of this. Another amendment outlawed any and all potential competitors to the central bank’s digital currency.
The Ministry of Finance described the digital rupee’s objective as bringing considerable benefits, such as reduced reliance on cash, more seigniorage due to lower transaction costs, and reduced settlement risk, in response to the Lok Sabha’s reservations about it.