India could allow the holding of cryptocurrencies as assets – but not be used for payments.
Image Credit: Pixabay

New Delhi: Indian Prime Minister Narendra Modi called for cooperation among democracies around the world to ensure cryptocurrencies like Bitcoin do not “end up in the wrong hands”, delivering the comments as his government crafted new rules for digital currencies.

Modi did not elaborate on these fears in his speech delivered virtually at the Sydney Dialogue, a forum focused on emerging, critical and cybernetic technologies.

But authorities in India and elsewhere have pointed out the dangers of the use of cryptocurrencies by terrorist groups and organized crime, and the risk of destabilization they pose to national economies.

After touting the opportunities offered by technology in the cyber age, Modi cautioned against digital currencies.

“Take for example cryptocurrency or Bitcoin. It is important that all democratic nations work together on this and ensure that this does not fall into the wrong hands, which can spoil our youth, ”Modi said.

Indian officials who are currently drafting regulations are likely to propose a ban on all cryptocurrency transactions and payments, while allowing investors to hold them as assets, such as gold, bonds and stocks, reported Wednesday. the Economic Times newspaper.

Modi chaired a meeting on Saturday to discuss India’s approach to cryptocurrencies, and the Economic Times said his cabinet could receive the draft regulations for consideration within two to three weeks.

In September, Chinese regulators banned all cryptocurrency transactions and cryptocurrency mining.

Bitcoin, the world’s largest cryptocurrency, hovers around the $ 60,000 level, having more than doubled in value since the start of this year.

India’s digital currency market was worth $ 6.6 billion in May 2021, up from $ 923 million in April 2020, according to blockchain data platform Chainalysis.