India Finalising Consultation Paper on Cryptocurrencies, Says DEA Secretary

The government will soon finalise a consultation paper on cryptocurrencies with inputs from various stakeholders and institutions, including the World Bank and the IMF, Economic Affairs Secretary Ajay Seth said on Monday. He also underlined the need for a global response to deal with issues concerning cryptocurrencies as these operate in the virtual world. The Reserve Bank of India (RBI) on many occasions has expressed its reservation about such virtual currencies citing a threat to macroeconomic stability.

Speaking on the sidelines of the curtain raiser event of ‘Iconic Week’ as part of Azadi Ka Amrit Mahotsav to be celebrated by the Finance Ministry, Seth said the consultation paper is fairly ready.

“We have consulted not just the domestic institutional stakeholders but also organisations like the World Bank and the IMF. So, we hope that we will soon be in a position to finalise our consultation paper,” he said.

Simultaneously, he said, India has also started work on some sort of global regulations.

“Countries which have prohibited, they can’t success unless there is a global consensus around that. There has to be a broad framework of participation. Digital assets, whatever way we want to deal with those assets, there has to be a broad framework on which all economies have to be together. No country can choose to either of the position. We need a global consensus on crypto regulation,” he said.

If you recall, Seth said, the Prime Minister has made this observation time and again.

Expressing hope, he said, India is poised to become the fastest growing among large economies in the world despite global challenges.

“We can overcome the current challenges as well as the challenges that will come to us in the coming years in the Amrit Kal. There are strong global headwinds which have impacted the global economy, … Even despite all those, India is poised to grow the fastest among all large countries in the world. That was the position six months back and that will be our assessment even today,” he said.

Seth also assured that inflation should be moderating with the help of both and fiscal and monetary measures.

When asked what more measures are being envisaged to cool down prices, he said, it is evolving situation and difficult to say what future steps are likely.

Whatever the current challenges are they are being responded to in a timely manner, he added.

Earlier this month, the government had announced several measures, including a cut in excise duty on petrol and diesel prices by Rs. 8 per litre and Rs. 6 per litre, respectively.

With moderation in commodity prices, he said, “We do expect in the coming months the inflation should be moderating, and for that whatever steps that were needed from the fiscal side have been taken, and the RBI is also taking those measures.” When asked if the geopolitical tension can impact growth, he said, “when headwinds are there obviously things slow down.” At the time of the budget, he said, “one estimate was Indian economy will grow at 8-8.5 percent, the budget assumed 7.5 percent, at that point in time…I have not seen any rating agency talking about a number lower than this. This is a dynamic situation…please understand we are fairly integrated with the global economy.” As per the Economic Survey, India’s economy is expected to grow by 8-8.5 percent in the fiscal beginning April 1.

The International Monetary Fund recently lowered its growth forecast to 8.2 percent which is higher than 7.2 percent by the Reserve Bank of India.