Indian Finance Minister Smt. Nirmala Sitharaman on Cryptocurrency — Recent Perspectives
Indian Finance Minister Smt. Nirmala Sitharaman has consistently emphasized a cautious but evolving approach toward cryptocurrencies, balancing innovation with financial stability and regulatory prudence.
In recent public discussions and government responses, Sitharaman has underlined the risks and regulatory challenges posed by private cryptocurrencies. She noted that the Reserve Bank of India (RBI) has recommended banning cryptocurrencies, arguing that they lack intrinsic value and could destabilize monetary and fiscal stability because they are not backed by central banks or sovereign authority. Consequently, she highlighted the necessity for any effective regulation or stance on crypto to involve significant international cooperation, given the borderless nature of digital assets.
Sitharaman has also been clear that cryptocurrencies cannot be considered legal tender in India. While they may function as tradable assets, they do not meet the criteria to be recognized as currency because only assets issued by the government or central bank can fulfill that role.
On taxation, the Finance Minister reiterated that India imposed a 30% tax on income earned from crypto transactions, along with a 1% tax deducted at source (TDS) on transfers above a certain threshold. This tax framework aims to ensure transparency and traceability of buyers and sellers in the crypto market, while discouraging unregulated economic activity.
Sitharaman has further emphasized the importance of global regulatory consensus. She maintains that due to the inherently cross-border nature of digital assets, no single country can effectively regulate crypto in isolation. A cooperative, worldwide approach is essential to mitigate risks like money laundering, terror financing, and macroeconomic instability.
Overall, Sitharaman’s stance reflects measured caution—supporting financial innovation where beneficial, while advocating strong regulation, international collaboration, and clear taxation to protect the Indian financial system and investors.
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