Consultative paper on cryptocurrency likely to be ready in few months: sources

The consultative paper on cryptocurrency is likely to be ready in a few months, government sources told CNBC-TV18, adding that the Centre has received views of institutional stakeholders on the matter.

For the consultative paper, comments have been received from the Reserve Bank of India (RBI), Securities and Exchange Board of India (SEBI), International Monetary Fund (IMF), Financial Stability Board (FSB), and World Bank, according to the sources, who added that private stablecoins are also under discussion.

Stablecoins are cryptocurrencies backed by real-world assets such as commodities, fiat currency (issued by the government), gold, or other cryptocurrencies. Stablecoins are digital assets that have a stable valuation like a fiat currency but also provide utility and mobility of a cryptocurrency. Put simply, they can be seen as the bridge between a volatile cryptocurrency and a stable fiat currency.

The government is trying to firm up its views on cryptocurrency assets. In February, the Supreme Court had asked the Central government to clarify if cryptocurrencies are legal or not in the country.

The country has not made its stand clear on the legality of cryptocurrencies although a 30 percent tax was levied on gains made through such assets during Budget 2022. Finance Minister Nirmala Sitharaman later made it clear that taxing gains made via digital assets does not make cryptocurrencies legal tender and that the government is still working on a Bill on cryptocurrencies.

The sources said that the government is looking at a global approach on cryptocurrency and doesn’t want to rush in. The matter may be taken up in the next G-20 meeting.