• India’s finance minster Nirmala Sitharaman has stated that the country is not shutting off against cryptocurrency. 
• The minister further stated that the country is not ready to take on the path of El Salvador’s Bitcoin strategy. 

The finance minister of India, Nirmala Sitharaman, has revealed that the country will not “shut out” a “futuristic thing” like crypto. According to the finance minister, there has been a lot of consultation regarding crypto assets. Sitharaman’s statement came after El Salvador officially announced the adoption of Bitcoin as a legal tender, becoming the first country in the world to officially accept Bitcoin. Although India will not be entirely against crypto, the minister said that the government may not be ready to emulate El Salvador’s Bitcoin strategy. 

India is not ready to emulate El Salvador’s crypto strategy

There was a protest in El Salvador before the official legalization of Bitcoin. The citizens protested against the Bitcoin bill despite the ongoing three-month protest ban in the country at the time. Referring to the protest, Sitharaman said that people care about the kind of currency that is accepted in their countries. She added that the concern on cryptocurrency among citizens is not a matter of literacy or understanding. Rather, the finance minister said it is a matter of transparency. 

In a statement, Sitharaman said:

You’d think common people don’t care about digital currency; but the public took to the streets against the move. It’s not a question of literacy or understanding – it’s also a question of to what extent this is a transparent currency; is it going to be a currency available for everyone.

India’s CBDC

India is one country that has not reached any significant stage regarding central bank digital currencies (CBDCs). Despite that the country has been conducting research and studies on CBDC since 2017, there is yet to be an explicit understanding of the legal status of cryptocurrency. 

Speaking further, Sitharaman mentioned that the Indian government has consulted with a lot of stakeholders, including the Reserve Bank of India, on crypto. A recent committee that was established this year supported the conclusions of the 2017 committee. The 2017 committee recommended a blanket ban. Also, there are penalties in place for anyone who violates the prohibition. With consideration for futuristic technology like crypto in India, the finance minister said that the government will need to develop new and different views. 

Sitharaman stated:

This is not an era where you can say I don’t care about what’s happening, or we don’t want to do anything. At the same time, are we yet ready to go the El Salvador way? We have to be sure that a futuristic thing can’t be shut out.

In response to whether CBDC should have its own CBDC, Sitharaman said that the country needs to evolve. She also added that India has to be “cautious.”

RBI governor Shaktikanta Das has noted that India may kick start its first CBDC trial project in December. The governor said that the central bank is being careful about the project. He also said that the bank is working against any problems that may arise in the future.