A recent statement from Indian Minister of IT and Electronics, Rajeev Chandrasekhar, has highlighted the potential macroeconomic risks posed by cryptocurrency. According to a report from the Times of India, Chandrasekhar believes that cryptocurrency is a legitimate risk factor for macroeconomics and thus needs to be regulated.
The minister made the remarks during the Times Network’s India Digital Fest. He reportedly said, “It is a very legitimate case that crypto represents macroeconomic risks. It represents many other types of risks. FTX and other cases reaffirm that crypto is not business as usual and crypto is not innovation. In India, crypto is not illegal if you buy them through legitimate channels of LRS (Liberalised Remittances Scheme) which are RBI approved dispensation on foreign exchange.”
Chandrasekhar further noted that the RBI is clear on the issue, and the government has an obligation to explain to citizens that they cannot exchange rupees for crypto. He added that the best way to approach crypto without creating downside risk to the economy is through CBDC (central bank digital currency).
The minister also commented on the slowdown in funding for startups and the digital economy. He said that the nature of startups involves peaks, troughs, ups and downs, and business cycles. Chandrasekhar believes that people are becoming more aware of where value lies, and this is resulting in valuation corrections due to the Covid pandemic and other headwinds.
Finally, Chandrasekhar spoke about the strength of India and how it works with new technologies. He noted that the country’s entrepreneurs and semiconductor designs are present in all major geographies.
