IFSC can’t shy away from cryptocurrency: Chairman Srinivas

The International Financial Services Centre (IFSC) at GIFT City in Gujarat cannot “shy away” from cryptocurrency and the less risky and volatile ones could be used to give the Indian economy a push, said Chairperson Injeti Srinivas in Gandhinagar Monday.

“As an international financial centre, we also feel that we can’t shy away from crypto. We will have to look at it,” said Srinivas adding IFSCA will not deviate from the stand the Central government takes on the issue. He was speaking during the inaugural session of the ‘certificate course on financial market laws with special emphasis on their applicability on IFSC’ at the Gujarat National Law University (GNLU).

“But we need to distinguish between crypto as an asset, crypto as a currency and crypto as technology. We have to pick those which are less volatile and less risky and use crypto to give that push to our economy. That is very important and without that, we lag behind,” he said, adding the way ahead and how the investors of cryptocurrency will be protected needs to be figured out.

The IAS official also pointed out the disadvantages of cryptocurrency. “Private cryptocurrency is not tenable because the currency is a medium of exchange; it is a unit or account; it is a store of value. When it does not have sovereign backing how can it be a currency,” he said.

Citing the Percy Mistry-headed expert committee report of 2007 on IFSC, the IAS officer said it was a “misconception” that the report recommended making Mumbai an international financial centre. “The Percy Mistry report basically made three recommendations. First, it said capital account controls should be removed across the country. The second recommendation was that you have one unified authority and the third recommendation was to drastically simplify your laws,” he said adding the Centre has kept the decision to have one or more financial enclaves “open.”

He said IFSC has the capability to attract global capital. “There is an estimate that for achieving the sustainable development goals you many require $8 trillion by 2030-35. We cannot generate $8 trillion through our savings. You need to bring in capital. Whatever capital is coming now by way of FDI or FII is good. We are getting $60-80 billion annually. But that is not sufficient. The type of requirements we got, that is a minuscule part of what we need,” he said.

“We can’t match Dubai or Singapore in tax concessions. We can match them or beat them in terms of sustainability,” Srinivas added.

Earlier in the day, he inaugurated the certificate course at GNLU which will be conducted jointly with IFSCA. The course will be conducted in a hybrid mode — online and offline sessions — over four months. Close to 100 participants have registered for the course.