Crypto Regulation Will Take Time, "Can't Be Rushed Through": Nirmala Sitharaman

Flagging concerns over likely misuse of crypto, Finance Minister Nirmala Sitharaman has said India would take a thoughtful decision on regulation around the virtual currency.

The decision on crypto will not be rushed through, she said in an interaction at Stanford University.

"It will have to take its time...all of us to be sure that at least with a given available information, we're taking the decern decision. It can't be rushed through," she said.

The minister clarified that the government is open to promoting innovation and well-grounded progress in distributed ledger technologies, which are coming in the blockchain.

"So, our intention is in no way to hurt this (innovation around crypto)...but (we need to) define for ourselves...," she said.

The minister noted that cryptocurrencies could also be manipulated for money laundering or terror financing.

So, these are some of the concerns, not just India, but many countries have and are also discussed in global, multilateral platforms, she added.

India plans to introduce central bank-backed digital currency or Central Bank Digital Currency (CBDC).
Ms Sitharaman, in her Budget speech on February 1, had announced that the RBI would issue the digital rupee or CBDC in the coming fiscal year.

She had also announced that the government would levy a 30 per cent tax on gains made from any other private digital assets from April 1.

Speaking about CBDC, Reserve Bank of India Deputy Governor T Rabi Sankar said a nuanced and calibrated approach is essential for the launch of India's maiden digital currency as it would have various implications for the economy and monetary policy.

He said that essential learning does not come from global experience but your own experience.

The merger of HDFC and HDFC Bank, Ms Sitharaman said, is a good step because India needs many more big banks to cover growing needs for infra financing.

Earlier this month, India's largest private lender HDFC Bank agreed to take over the biggest domestic mortgage lender in a deal valued at about USD 40 billion, creating a financial services titan in the largest deal in the country's corporate history.

The proposed entity will have around Rs 18 lakh crore, a combined asset base. The merger is expected to be completed by the second or third quarter of FY24, subject to regulatory approvals.

The transaction involves the amalgamation of HDFC and its two wholly-owned subsidiaries HDFC Holdings and HDFC Investments, with HDFC Bank.

HDFC, as the promoter of HDFC Bank, holds 21 per cent in the lender along with the two subsidiaries, which on the merger will be more than double the size of private sector peer ICICI Bank.

About the digital divide, Ms Sitharaman said some steps had been taken to bridge it.

Asked about the under-reporting of COVID death numbers, she said the data the central government reported was compiled from states.

The revision was due to changes made by the state governments, she said, adding some death that took place at home was updated later by states.