Indian Government Committee’s Apprehensions of Adverse Impact of Cryptocurrencies on INR

After the in-depth study of the cryptocurrency industry, the Indian governmental committee now seems to be apprehensive on the adverse impact of the crypto-assets on the Indian rupee.

However, the Government of India has confirmed that the report containing a regulatory framework for cryptocurrencies by an inter-ministerial committee (IMC) is in the finalization stage. 

The committee has been meticulously probing cryptocurrencies in order to design a clear regulatory framework from the recent past. While the IMC headed by Subhash Chandra Garg, Secretary of the Department of Economic Affairs, is entrusted for developing the country’s crypto regulatory framework. He hinted whether the wholesome or adverse impact on the financial ecosystem is still dubious.

Nevertheless, it has already been reported that a senior Indian government official from a board created by Indian finance ministry admitted that there have been ideas of creating India’s own government-backed digital coin.

In addition to the above factors, the worst of the decline in global crude oil price saga has been a major driving force for most of the emerging FX bloc, especially, currencies like INR. Whilst the move to a lower range releases a major pressure point for the INR. If oil prices are sustained around current levels, it would imply an annual current account deficit of sub-2.0% of GDP and a basic balance of sub-1.0% of GDP. While uncertainty around general elections outcome in Q2 likely to curb capital flows, which in turn, affects rupee turbulence.

Currency Strength Index: FxWirePro's hourly BTC spot index is inching towards -88 levels (which is bearish), while hourly USD spot index was at 82 (bullish) while articulating (at 11:32 GMT).

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