Sitharaman says RBI will take a final call on cryptocurrency

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The government has said that it will not shut off all options for cryptocurrency business and would allow a few experiments.</p>
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"My view on this is that of course the Supreme Court had commented on cryptocurrency and while the RBI may take a call on official cryptocurrency but from our side, we are very clear that we are not shutting off all options,” Finance Minister Nirmala Sitharaman, while speaking at the India Today Conclave said.</p>
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The Union Cabinet, she said is coming out with a detailed plan on cryptocurrencies. Though Sitharaman said that the Reserve Bank of India will take the final call on cryptocurrencies, a window facilitating it use could be provided as financial technology (fintech) companies depend on blockchain, necessary for the digital currencies.</p>
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Speaking on the Cabinet note, she said “It is nearing completion, and then it would be taken for the Cabinet of course. The Supreme Court had commented on the cryptocurrency. We are very clear that the Reserve Bank will take a call on official cryptocurrency.”</p>
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Amid the recent surge in demand for cryptocurrencies, the RBI has raised concerns that the digital currency may impact financial stability in India. All major concerns related to cryptocurrencies, such as regulations, have been conveyed to the government, RBI Governor Shaktikanta Das has said.</p>
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A high-level Inter-Ministerial Committee on issues related to virtual currencies, has also suggested prohibiting private cryptocurrencies, like Bitcoin, in India.</p>
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The RBI has been uncomfortable with cryptocurrency trading since December 2013, when it first cautioned the markets.</p>
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In April 2018, the central bank imposed a ban on transactions undertaken in virtual currencies. The move was aimed at protecting the Indian market and the interests of the small and retail investors. Besides, the ban was also expected to prevent money laundering. A notification to this effect was issued by the RBI on April 6, 2018, which was challenged by the Internet and Mobile Association of India (IAMAI).</p>
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Trading in cryptocurrency or virtual currencies have always been considered suspicious by most banks across the globe as it poses risks relating to money laundering besides creating a complex alternative system.</p>
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Cryptocurrency is an internet-based medium of financial transaction, using cryptographical functions to carry out trading between two entities through private and public keys.</p>
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Typically trading or cryptocurrency transactions are not regulated or controlled by any central authority. Banks and financial institutions can deal in cryptocurrency independently and trading and transfers between two entities can be undertaken with a minimal processing fees.</p>
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Cryptocurrency can be of various types, bitcoin being one of the most popular one.  The virtual currency is supported by blockchain or a decentralised network.</p>