India’s finance minister confirmed this week that India is being as cautious as anybody else in its approach to Facebook Libra and other cryptocurrencies.
India and Others to Show “Extreme Caution”
Finance Minister Nirmala Sitharaman said at the 2019 Annual Meetings of the International Monetary Fund and the World Bank in Washington, D.C.:
“On our side, the Reserve Bank Governor spoke about it during our turn to intervene. I got the sense that many countries were cautioning on rushing into this […]. Countries will have to show extreme caution much before anything is said or moved on this.”
The Reserve Bank that Sitharaman references previously recommended an all-out ban of cryptocurrencies in India, except those approved by the government.
The move would effectively make millions of Indians already holding cryptocurrencies into criminals, and the proposed ban contained no period of redemption or amnesty.
Sitharaman also reportedly questioned whether crypto assets should ever be referred to as “stablecoins.”
In his view, of course, the only possible stable asset is one issued by a central bank or government.
The minister wanted to be clear that he believed India was moving in line with other governments on its Libra caution.
Libra Rouses Global Governments
He said that “everyone without fail” had concerns regarding Facebook’s cryptocurrency project. He’s not wrong, of course. Facebook’s Libra has seen intense inspection from the US government among others.
Even the traditionally permissive Swiss government has said the company will likely require more than usual licensing to do what it intends with Libra.
India is home to one of the largest populations on earth, and therefore rather important when it comes to the long-term arc of blockchain.
To date, native blockchain efforts have been few, with projects like Eleven01 having the most success.
As noted above, the government recently considered a report from the country’s Reserve Bank that proposed a full scale “white list” approach, which would essentially mean that any cryptocurrency not on the list was fully illegal.
The approach would grant the government the same kind of power it already has in fiat economies, where its ability to levy taxes makes it the biggest influence in currency decisions.
To date, few countries have comprehensive crypto regulations that meet the needs and wants of the blockchain industry, which speaks to the relative infancy of the technology versus things like the Internet.