FM Nirmala Sitharaman says govt and RBI will take a joint decision on cryptocurrency

Union Finance Minister Nirmala Sitharaman has said that the government and RBI are on board on the issue of cryptocurrency and whatever decision is taken on it will be taken together. She said, not just on cryptocurrency but on every other thing as well, there is a complete harmony with which the government and RBI are working.

The finance minister said this while addressing media in New Delhi today after attending the Central Board of Directors of the RBI in its customary post-Budget meeting.

Ms Sitharaman in her Budget speech on February 1, 2022, had announced that Digital Rupee or Central Bank Digital Currency (CBDC) would be issued by the RBI in the coming fiscal year. She had also announced the government will levy a 30 per cent tax on gains made from any other private digital assets from April 1, 2022.

Replying to a media query on the ABG Shipyard Ltd case, she said, the NDA government took less time to detect and take action in the ABG Shipyard fraud case. She said the bank took below-average time to detect the fraud in this case.

The Minister added that this was the loan given prior to 2013 and the account had become NPA before 2014 January. Ms Sitharaman also said the overall health of banks has improved in the country.

On the occasion, RBI Governor, Shaktikanta Das said the country's inflation projections are quite robust and the momentum of inflation right from last October onward is on a downward slope.

CBDC is a digital or virtual currency but it is not comparable to the private virtual currencies or cryptocurrencies that have mushroomed over the last decade. Private virtual currencies do not represent any person's debt or liabilities as there is no issuer. They are not money and certainly not currency.

Last week, Das had said the central bank does not want to rush and is carefully examining all aspects before the introduction of the CBDC.

The Trend and Progress of Banking in India report, released by the RBI in December last year, had said that given the CBDC's dynamic impact on macroeconomic policymaking, it is necessary to adopt basic models initially and test comprehensively so that it has minimal impact on monetary policy and the banking system.

India's progress in payment systems will provide a useful backbone to make a state-of-the-art CBDC available to its citizens and financial institutions, it had said.