In recent days, comments by senior Indian government figures indicate that India may be considering a proactive approach to stablecoins. Given stablecoins are a type of cryptocurrency, this would be a departure for the state.
The government was originally strongly against cryptocurrencies, with the Reserve Bank of India’s efforts to limit their usage overturned by the courts. In comments this week, Piyush Goyal, Minister of Commerce & Industry, described the government’s position as neither supporting nor limiting cryptocurrency. The government just heavily taxes transactions. Instead, India has been pursuing a CBDC.
However, recent developments in the US – particularly regulatory moves favoring stablecoins – appear to have prompted a reassessment, highlighted by comments from India’s ruling party as well as Finance Minister Nirmala Sitharaman. While Sitharaman’s statements didn’t sound wholeheartedly enthusiastic, the ruling party envisions the same benefits that US Republicans see: that stablecoins can drive demand for government debt.
“Innovations like stablecoins are transforming the landscape of money and
capital inflows. These shifts may force nations to make binary choices, adapt to new monetary architecture or risk exclusion,” said the Finance Minister. “Such developments underscore the scale of transformation which is underway. They also remind us that no nation can insulate itself from the systemic changes. Whether we welcome these shifts or not, we must prepare to engage with them.”
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