India will not rush into finalizing a policy on cryptocurrencies and virtual digital assets, but take an informed decision after due deliberations across multilateral fora, finance minister Nirmala Sitharaman said while addressing an event at Stanford Medicine.
At a fireside chat organised by the University, Sitharaman said while blockchain had the potential to contribute positively to the economy, it could also be manipulated and used for money laundering or terror financing activities.
“Blockchain is full of potential not just in the payments arena but also in many others. Our intention is in no way to hurt the ecosystem, or to even say that we don’t need it, but to define for ourselves how we need them and in what ways their growth should be facilitated and how we are going to handle it… (This is so) because as much potential it may have for positive contribution to the economy, it also can be manipulated for not so desirable ends —whether it is money laundering or leading to financing terror,” she added.
These are some of the concerns,not just for India, but for many other countries, Sitharaman said. “It will take its time for all of us to be sure…within the given available information, we are taking a discerned decision… and it can’t be rushed through.”
On sanctions, she said that such moves always have a collateral impact on many other countries due to global interconnectivity in the digital era, “and may need to be factored in during decision making”.
The US has imposed several rounds of sanctions on Russia since its invasion of Ukraine on 24 February, impacting operations of banks and other entities. “Sanctions always have an impact on the economy, of not just the country on which the sanction is levied, but a collateral impact on many others. I suppose that is the situation, much more so now because we are globally far more interconnected than ever before.”
“When decisions are taken to impose sanctions, these set of unintended consequences may have to be factored in the digital era.”
On India’s stand on Russia, Sitharaman said its balanced stance was not only due to economic interests, but also the security aspect, due to the borders it shares with some countries. “The balance that India has taken in every one of the decisions in this context has been because of the geopolitical location of India…as we share land borders with some of these countries. Over the decades when the situation arose… India was left to defend for itself its own economic, land and border interests.”
In a separate industry event, Sitharaman assured investors in the US that India was willing to understand “pain points” and suitably address any bottleneck they face. Speaking at a roundtable on ‘Investing in India’s Digital Revolution’ in Palo Alto, California, the minister urged the investors interested in India to engage with the startup cell of the department of promotion of industry and internal trade. “FM Sitharaman encouraged constant engagement with investors to understand and address their concerns. FM said she is open to suggestions, understanding pain points, and offering necessary redressal wherever possible,” the finance ministry said in a tweet.