For a long time India was a country which took a hard-line stance on cryptocurrency. India’s government has been having risks to the digital currencies as laundering of money and the financing of terrorism. A group of senior officials tasked with developing a new cryptocurrency normative framework for India is now concerned about its impact on the rupee. In terms of introducing cryptocurrency in India, it seems that the government is constantly looking for ways to dowgrade the role of cryptocurrency in the future of money instead of using and integrating it into Indian society.
The Committee, which is tasked with developing regulations cryptocurrencies in India is chaired by Subhash Chandra Garg, senior official and Economic Affairs Secretary at the Ministry of Finance. The Committee was originally established in 2017 under the leadership of Garg, and now it is closer than ever to the final release of its crypto-regulatory framework. Insiders claim that the Commission is extremely concerned that the admission of cryptocurrency payments can significantly affect the price of their national currency, the rupee.
Recently, an anonymous representative of the country’s crypto-ecosystem met with the Committee and has now expressed the Ministers’ concern. He said: “If bitcoins and other digital currencies are approved as a means of payment, won’t it destabilize the fiat currency in the end?”
Although it is true that the allowance of cryptocurrencies in India will have some impact on the national currency, some experts believe that this problem is in the distant future until there is an increased use of cryptocurrencies.
Rahul Raj, the founder of the Indian cryptocurrency exchange Koinex, believes that it will take “a considerable time before this problem comes”:
“Now it’s premature to worry about this because only a small part of payments is made using virtual currencies, and this will not be a problem until the blockchain reaches the scale that Mastercard or Visa has”.
The Reserve Bank of India (RBI) has considered the possibility of creating its own cryptocurrencies. And while the government isn’t really open to any virtual currencies, they want to explore Blockchain technology.