NEW DELHI: Union Finance Minister, Nirmala Sitharaman stated that any legislation regulating or outlawing cryptocurrencies can only be effective after extensive international collaboration on assessing the dangers and advantages. Sitharaman stated in a written response to the Lok Sabha that "Cryptocurrencies are by definition borderless and require international engagement to prevent regulatory arbitrage."

In response to the question of whether RBI had voiced its concern regarding the negative impact of cryptocurrencies on the Indian economy, she said that RBI had stated that cryptocurrencies are not considered to be currencies because every modern currency must be issued by the central bank or the government. Furthermore, she said, "the value of fiat currencies is anchored by monetary policy and their status as legal tender, whereas the value of cryptocurrencies rests solely on speculative expectations of high returns that are poorly anchored, so it will have a destabilising effect on the monetary and fiscal stability of a country.

The central bank has advised drafting legislation on this sector and is of the opinion that cryptocurrencies should be banned in light of the worries raised by the RBI over the disruptive influence of cryptocurrencies on the monetary and fiscal stability of a country. 

Shaktikanta Das, the governor of the Indian central bank's RBI, recently stated that cryptocurrencies are a clear threat and that anything that draws value just from conjecture, with no underpinning, is nothing more than sophisticated speculation.

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