Former Indian Economy Minister Subhash Chandra Garg believes that if central banks launch their own digital currencies, people will no longer be interested in public cryptocurrencies.
He stated this during the Business Standard Insight Out Summit. In his speech, Subhash Chandra Garg said that the widespread adoption of cryptocurrencies could negatively affect the revenues of states. He explained that cryptocurrency platforms generate huge returns from users’ investments and operations. At the same time, many of them evade paying taxes, while these funds could replenish the state budget. Garg expressed the hope that after the emergence of digital currencies of central banks “most of the private cryptocurrencies and stablecoins will disappear.”
Indian Finance Minister Nirmala Sitharaman has supported the idea of launching a state stablecoin that will be controlled by the Indian government and will ensure transparency of transactions. However, she is confident that one cannot “close our eyes” to the latest technologies and ignore the existence of cryptocurrencies, which are in demand among citizens. Despite Garg’s statements, the CEO of Indian cryptocurrency exchange WazirX, Nischal Shetty, expressed optimism about government cryptocurrencies, as their launch will help develop the latest technologies around the world.
With these views in mind, Garg deems it appropriate to bring the cryptocurrency regulation bill under consideration by the government in line with India’s Securities Contracts Regulation Act of 1956. He also proposed amendments to the Indian Contracts Act of 1872 to include the concept of “smart contracts”.
Earlier, the Governor of the Reserve Bank of India (RBI) Shaktikanta Das said that the central bank plans to start testing the digital rupee by the end of 2021. At the same time, some RBI analysts fear that the digital rupee could provoke an outflow of money from commercial banks and undermine their role in the economy.
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