Finance Minister Nirmala Sitharaman has asserted that India’s policy position on cryptos and blockchain will take its time and cannot be rushed through, despite “impatience” from the outside world for the country to quickly firm up its stance on this front.
During a fireside chat at Stanford University in the US during her ongoing visit, Sitharaman underlined that India is not looking to hurt developments made on distributed ledger technologies or blockchain.
“We recognise that there is a lot of potential and well-grounded progress made in distributed ledger technologies; blockchain itself is also full of potential, not just in the payments arena but in others as well. Our intention is not to hurt these or even say we don’t need them, but to define for ourselves how we make them, in what way their growth should be facilitated, and how we will handle it,” she said.
Sitharaman highlighted that while these developments contributed positively to the economy, they can also be manipulated towards undesirable ends, whether it be money laundering or the financing of terror.
She added that these concerns, and others, have also been discussed in several multilateral platforms and in meetings with the IMF and the World Bank. Bank for International Settlements (BIS) is also looking into understanding these technologies and their consequences.
“I can understand the impatience in the outside world. But sorry, this is how it is going to be. The decision will have to be a discerned one; it cannot be rushed through,” Sitharaman said.
HDFC-HDFC Bank merger
When asked to comment on the recent announcement of HDFC’s merger into HDFC Bank, Sitharaman said it is a good step forward.
“(HDFC) is going through the process of regulatory approval. I think it has been announced after due consideration. It is a good step as India needs more big-sized banks to deal with the requirements of various sectors,” she added.
Inflation
Sitharaman noted that in an interconnected world, inflation spreads faster. This time round, inflation can’t solely be linked to the US Fed’s decision to regulate its economy. It will largely be because of the rise in commodity prices.
She added that global crude oil remaining above $100 per barrel will undoubtedly heat up several economies.
“With prices remaining high and supplies remaining constrained — including that of natural gas — inflation is aggravated. Constrained supply of natural gases in particular causes anxiety because we want to transition from using coal to natural gas before we get into complete renewables,” Sitharaman said.