National security considerations to dictate India’s cryptocurrency policy: Jayant Sinha

Parliamentary Standing Committee on Finance is considering a proposed legislation on cryptocurrencies with national security considerations at the core. The chairman of the Parliamentary committee added that terror financing using crypto instruments and domestic security threats are real issues.

“We have to be very watchful about what happens to these crypto assets and cryptocurrencies. Use of these kind of crypto instruments in terror financing and for domestic security threats is something we want to be mindful of,” Parliamentary Standing Committee on Finance chairman Jayant Sinha said.

Sinha further mentioned that replicating advanced economies on virtual currencies is not possible as India does not have full capital account convertibility. The former Union minister was speaking at an event organised by the Internet and Mobile Association of India.

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He added India’s approach vis-à-vis cryptocurrencies will have to be distinct considering our unique situation. “Our solution will have to be distinct and unique simply because of our unique circumstances. We have to balance stability and growth but we recognise how important this whole area of crypto is,” Sinha said.

Finance Minister Nirmala Sitharaman said last month that proposed legislation regarding cryptocurrency is pending before the Cabinet. The interministerial committee on cryptocurrency to study issues around virtual currencies and proposed specific actions has already submitted its report. The panel has recommended all private cryptocurrencies except any virtual currencies in the state should be prohibited across India.

Meanwhile, RBI has some concerns on cryptocurrencies in the market and conveyed the same to the government. RBI Governor Shaktikanta Das underlined the government and the central bank’s commitment to financial stability and said there are no differences between the RBI and the Finance Ministry on the matter. “We should now await the final decision on the matter” from the Centre, Das added.

Edited by Mehak Agarwal; with agency inputs

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