The global crypto market cap has crossed $1 trillion, while the price of Bitcoin crossed $22,000, and that of Ethereum crossed the landmark of $1,000.
Union Minister of Finance Nirmala Sitharaman tells Parliament in a written reply on concerns expressed by the Reserve Bank of India on the destabilising effect of cryptocurrencies on the monetary and fiscal stability of a country.
The global crypto market cap has crossed $1 trillion, while the price of Bitcoin crossed $22,000, and that of Ethereum crossed the landmark of $1,000.
The price of Bitcoin was $22,224.66, and rose by 3.14 per cent in the last 24 hours, while Ethereum was up by 6.67 per cent, and it was trading at $1,456.44.
Decentralised finance (DeFi) currently accounts for $6.13 billion in total volume or 8.84 per cent of the 24-hour volume of the entire crypto market. All Stablecoins combined have a market cap of $62.69 billion, which accounts for 90.45 per cent of the 24-hour volume of the whole crypto market.
Parliament Announcement
Union Minister of Finance Nirmala Sitharaman today told Parliament that the Reserve Bank of India (RBI) has expressed concerns on the destabilising effect of cryptocurrencies on the monetary and fiscal stability of a country.
Therefore, the “RBI has recommended for framing of legislation on this sector. RBI is of the view that cryptocurrencies should be prohibited,” she said.
She said this in reply to a series of queries asked by Member of Parliament Thirumaavalavan Thol in Lok Sabha today.
Sitharaman, however, stressed on the fact that cryptocurrencies are by their very definition borderless, and hence, require international collaboration “to prevent regulatory arbitrage.”
Hence any legislation for regulation or banning of cryptocurrencies can be effective “only after significant international collaboration on evaluation of the risks and benefits and evolution of common taxonomy and standards,” she said
She further told Parliament that the RBI has mentioned that cryptocurrencies are actually not currencies, as modern currency can only be issued by central banks or governments.
“Further, the value of fiat currencies is anchored by monetary policy and their status as legal tender. But the value of cryptocurrencies rests solely on the speculations and expectations of high returns that are not well-anchored. So, it will have a destabilising effect on the monetary and fiscal stability of a country,” she said.
She said that the RBI has been constantly cautioning users, holders and traders of virtual currencies (VCs) via public notices that “dealing in VCs is associated with potential economic, financial, operational, legal, customer protection and security related risks.”
She further said that the RBI also advised regulated entities to “continue to carry out due customer diligence processes for transactions in VCs, in line with regulations governing standards for Know Your Customer (KYC), Anti-Money Laundering (AML), Combating of Financing of Terrorism (CFT), obligations under the Prevention of Money Laundering Act (PMLA), 2002, etc. in addition to ensuring compliance with relevant provisions under Foreign Exchange Management Act (FEMA) for overseas remittances.”