Crypto Assets Suitable Only for Trading and Speculation, Not Currency Use: India’s Finance Minister

Bitcoin’s record high above $72,000 hasn’t changed the Indian government’s position on crypto, according to Finance Minister Nirmala Sitharaman.

At the India Today Conclave 2024 on Friday, Sitharaman said the government maintains its position that crypto assets can be used only for trading and speculation. However, she emphasized that they cannot function as currencies.

“Currencies are to be issued with a fiat of the government or the central bank of the day,” she said. “And it is still unregulated in India. And that is why we thought it fit to raise it to the G20 forum.”

Indian Finance Minister Warns of Global Crypto Regulation Gap

The Finance Minister elaborated on why India is awaiting a larger-level framework. She said the government’s stance is based on the concern that if one country implements regulations on cryptocurrencies while others do not, it may create a loophole for illicit activities like money laundering, drug financing, or supporting terrorism.

For this reason, the government is advocating for discussions on the matter at the G20 level. “It has been very well received, and I’m sure there will be some framework emerging,” she said.

Indian Prime Minister Narendra Modi first expressed support for the establishment of a global regulatory framework for cryptocurrencies during the B20 summit in August.

Later, Sitharaman emphasized the importance of international collaboration on crypto policies following the G20 Finance Minister-Central Bank Governor meeting in Morocco, which took place during India’s presidency.

The leaders agreed on a roadmap to promote macro-economic and financial stability by implementing this policy framework. It emphasizes effectiveness, flexibility, and coordination among participating nations.

India’s Crypto Market Soars Despite Taxing Terrain

India, previously seen as less open to cryptocurrencies, is now experiencing a change in attitude.

Despite facing challenges such as high taxes (30%) on gains, Indian residents managed to accumulate over $1b in estimated gains last year, according to Chainalysis data.

Furthermore, in 2023, India emerged as the world’s second-largest crypto market, with transactions surpassing $250b.