A digital rupee isn’t good enough – let us keep our crypto

The sentiments of Nandan Nilekani, Infosys co-founder and Aadhaar architect, are that the Indian government should not ban crypto and that the Indian people should be allowed to have it as an asset class. 

There is long running saga going on in India right now and as it stands, the Indian government has stated that it is thinking to bring in legislation that will ban cryptocurrencies. An article by MoneyControl.com outlined the Nilekani stance. 

Nilekani is a prominent and well-respected person in India, and he continues to advise the Reserve Bank of India as well as various government agencies. He also played a major role in putting together various digital projects such as Aadhaar, and the UPI payments infrastructure. 

The fact that Nilekani is arguing against the proposed crypto ban should carry some weight. In a conversation with Indian investors at a Clubhouse session, Nilekani said: 

“We should think of crypto as an asset class and allow people to have some crypto. Crypto as a transaction medium will not work as fast as UPI, which is targeting a billion transactions a day. But crypto has enormous capital,” 

On his thoughts of a possible Indian Central Bank Digital Currency (CBDC) he asked whether there was actually a need for it: 

“Indian regulators are also considering a Central Bank Digital Currency or CBDC. I am not sure we need a private stable coin or if a digital rupee will be good enough. We need to look at how it will help Indians, how MSMEs can access capital using Bitcoins. No amount of tech is going to sway anyone's view," 

Cryptocurrencies are already firmly embedded in India and it will certainly cause a lot of pain for some if the proposed government legislation is enacted. Besides billions of dollar value in Bitcoin held in Indian investor portfolios, there are around 350 blockchain and cryptocurrency start-ups operating in the country. 

The Indian Finance Minister, Nirmala Sitharaman, is on record recently with statements perhaps seeking to calm crypto investor nerves when she said on CNBC: 

"We also want to make sure that there is a window available for all kinds of experiments in the crypto world," 

While this statement doesn’t go as far as to say there will be a rethink on the part of the Indian government, there doesn’t appear to be any hurry to bring anti-crypto legislation into force.  

Given the power of the government to make or break crypto in India, the ensuing developments will be watched with eager anticipation. 

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.