Commerce Ministry does not maintain data on crypto startups exiting India

A question was put across by Rajya Sabha member Derek O’Brien whether the Government keeps note of Crypto startups exiting India.

Rajya Sabha member Derek O’Brien asked the Ministry of Commerce and Industry if the Government had taken a note of crypto startups exiting India, its details, reasons, and impact on the economy.

In the answer, the Ministry replied that the Government does not maintain information on the exit of startups.

The government, also emphasized that the Reserve Bank of India has cautioned users, traders, and cryptocurrency holders about the potential economic, financial, operational, and legal risks.

The Central Bank has also advised its regulated entities to carry out due diligence in line with the regulations related to KYC.

Additionally, concerns were raised regarding the adverse effect of cryptocurrency on the Indian economy.

The Reserve Bank of India also highlighted that since cryptocurrency is not a legal tender and is not issued by the Central Bank, its value rests solely on speculations and expectations of high returns that are not well anchored. And so, it will have a destabilizing effect on the monetary and fiscal stability of the country.

Government’s Stance on Crypto Till Now

With the Indian Government implementing strict regulations, many startups have been forced to shift their base.

Places like Dubai are now being considered a crypto hotspots and are also introducing crypto-friendly rules and regulations.

Earlier this week, Finance Minister Nirmala Sitharaman highlighted in Parliament that Reserve bank of India has recommended to the Government that it should frame regulations regarding putting a stop to cryptocurrency.

However, the Government seeks Global collaboration for an effective ban on cryptocurrencies.