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Finance minister says ban on cryptocurrencies not possible without international collaboration Crypto Ban
Image Credit: PIB

Finance minister says ban on cryptocurrencies not possible without international collaboration

India Blooms News Service | @indiablooms | 19 Jul 2022, 01:24 pm

New Delhi: Sitharaman's statement on cryptocurrencies or Virtual Currencies (VCs) in Parliament was in response to a five-pointer question by Thirumavalavan, a member of Parliament from Tamil Nadu's Chidambaram.

Finance Minister Nirmala Sitharaman Monday said that the ban on cryptocurrencies was possible only after significant international collaboration on the risks, benefits, evolution of common taxonomy and standards.

Sitharaman was answering a five-pointer question by Thirumavalavan, a member of Parliament from Tamil Nadu's Chidambaram.

The MP's queries revolved around the Reserve Bank of India's cautious stance on crypto assets, concerns over adverse effects of crypto on the Indian Economy and India's progress in framework to legalize or restrict cryptocurrencies in the country.

"Cryptocurrencies are by definition borderless and require international collaboration to prevent regulatory arbitrage. Therefore any legislation for regulation or for banning can be effective only after significant international collaboration on evaluation of the risks and benefits and evolution of common taxonomy and standards," Sitharaman said.
The response reiterated that cryptos can't be 'treated' as currencies because every modern currency needs to be issued by the central bank or federal government and the value of fiat currencies is anchored by monetary policy and their status as legal.

"The value of cryptocurrencies rests solely on the speculations and expectations of high returns that are not well anchored. So it will have a de-stabilising effect on monetary and fiscal stability of a country," said Sitharaman, citing RBI.

She added that RBI has been cautioning users, holders and traders of virtual currencies through various public notices about dealing with such assets has economic, financial, operational, legal, consumer safety and security-related risks.