The Budget has proposed taxing virtual digital assets which gives an impression that cryptocurrency will be made legal. However, Finance Minister Nirmala Sitharaman made it clear that it is not the case. In an interaction with select print media journalists, she highlighted the steps to bring about a regulatory mechanism. Excerpts from the interaction

Q

Does tax on digital assets means legality?

. I have not even got into the legality issue and I can tell you why I am consistent on that. We have put out a document for consultation, stakeholders are coming into it. They are talking about what they want, what they do not want, so that process is on and once the process is completed, I know what I have to do in terms of regulations. The expression ‘cryptocurrency’ has actively spread for anything which is using block chain as technology. People generally think ‘crypto’ means currency, anything in digital is crypto. Equally, blockchain and distributed ledger technology is also crypto currency. But currency is when an authority issues it. Every individual cannot be mining currency. M

Currency cannot be issued by everybody, it has to be driven by central bank of the country and what we have announced today is that RBI will come up with the digital currency, . Now, outside of it, if trades of different types of assets are being bought and sold, value is being created, value being sold, profits being made, nothing stops me from taxing them. Every activity, where such things happen, is taxed. So, taxing that does not naturally and automatically bringing legitimacy, it is an activity for which I tax. . Let us get inputs from consultation, which is going on, after that we will come up with regulatory framework.,

Q

Since you mentioned regulatory framework, is there an option of banning what we say digital assets or so?

I do not know what is on table because consultation is on. It is a very wide consultation.

Q

Can we expect the Bill for regulation this session?

It is not listed for this session. First the consultation should be completed, only then I can predict if I need a Bill and when that Bill can come in. All that dependence on what the inputs are.

Q

If something wrong happens or say one particular platform does a fraud, what will one do in the absence of regulatory framework?

You may want to go to the court. I have to regulate when I can regulate and I am in the process of understanding what to do, till then you are taking a chance.

Q

What about Central Bank Digital Currency?

It is Budget announcement which means if there is Bill, it will come from RBI, passed by the Cabinet and then come to Parliament.

Q

What about new jobs?

When we say 68 per cent of defence procurements from Make in India produce, will this not create employment? This will lead to capacity addition which will in turn create new jobs. Similarly. when we will have food processing units through FPO, it will create jobs. We need to combined all such measures rather than simply saying create this many jobs. We are touching every sector especially labour intensive one.

Q

Is it correct to say the disinvestment number has been scaled down? What about privatisation of public sector banks?

You kept asking me Air India, that has been done. Now you are asking about banks. Things will go on. The policy of last year Budget continues.

Q

Borrowing appears to be very high and this could mean less resources for private sector ...

You have assumed that there is not enough money, there is. Start-ups have received equity infusionPrivate equity fund and venture capital fund have put ₹5.5 lakh crore. That kind of money has never been seen, IPOs have been funded, that kind of funding India has not seen earlier. So, I don’t think government borrowings being big and will crowd out private sector. There is enough money. All of us will be playing in it.

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