PM Modi says cryptocurrencies should be used to promote democracy, not harm it

A crypto bill potentially governing the trading of cryptocurrencies in India will be introduced in Parliament after cabinet approval.

Prime Minister Narendra Modi on Friday said emerging technologies like cryptocurrencies should be used to empower democracy and not weaken it. 

Policy makers in India say that unregulated transactions in digital currencies could harm macroeconomic and financial stability. After initially planning to ban cryptocurrencies, the Modi government is instead considering legislation to regulate their use. 

“We must jointly shape global norms for emerging technologies like social media and cryptocurrencies so that they can be used to empower democracy, not to weaken it,” Modi said at a virtual summit hosted by US President Joe Biden. 

There are an estimated 15 million to 20 million cryptocurrency investors in India, with total crypto holdings of around Rs. 40,000 crores as per industry estimates. The government does not provide any official data.

Recently, former Reserve Bank of India (RBI) governor Duvvuri Subbarao expressed his concerns about cryptocurrencies. Subbarao said that if legalized, cryptocurrencies could rob the central bank of control over the money supply and inflation management in the country. Subbarao shared his assessment this week while addressing a webinar organized by the National Stock Exchange (NSE) and the New York University (NYU) Stern School of Business. 

The development comes amid India’s plan to ban the operation of all private cryptocurrencies in the country, which was listed as an agenda for discussion in the ongoing winter session of Parliament last month.

According to the proposed law, violators of the law can be arrested without warrant and caught without bail, as well as heavy fines.

After getting approval from the Union Cabinet, the bill will be introduced in the Indian Parliament.