Indian FM Nirmala Sitharaman calls anonymity an ‘inherent risk’ in blockchain technology.

YEREVAN (CoinChapter.com) – Indian Finance Minister Nirmala Sitharaman has again attacked blockchain technology and cryptocurrencies in her signature, ambiguous style. Calling anonymity an “inherent risk” in blockchain technology, Sitharaman warned of the consequences of using the technology. According to the minister, using blockchain without addressing this concern will result in dangerous exposure. Such an exposure can be ripe with negative consequences. 

Sitharaman made the statement in her address during the Silver Jubilee Celebration of the National Securities Depository Limited (NSDL). 

“Unless we are able to guard ourselves against that anonymous element which can itself pose an inherent risk, we probably will be exposing ourselves much more than ever we would have imagined,” 

Sitharaman said at the NSDL event in Mumbai.

The finance minister also commended Madhabi Puri Buch, Chief of Securities and Exchange Board of India (SEBI). In her address at the event, Buch had advocated for the use of Distributed Ledger Technologies (DLT). However, she had also raised similar concerns about user anonymity.

In addition, Buch also argued for the exclusion of any anonymity in Central Bank Digital Currency (CBDC). As CoinChapter previously reported, the Reserve Bank of India (RBI) plans to lunch a Digital Rupee in the current fiscal year. 

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Nirmala Sitharaman tones down on her attack on cryptocurrencies

This is not the first time the Indian Finance Minister Nirmala Sitharaman has warned of the ‘evils’ of cryptocurrencies and blockchain technology. However, while her previous attacks were aggressive and blunt, she seems to be changing course now. 

During her speech at the NSDL, Nirmala Sitharaman’s praises for blockchain technology stood out more than her criticism of it. While it is still unclear what has prompted the minister to tone down her attacks, it does seem the recent criticisms of her policies have had an impact. 

“The distributed ledger technology brings in a great sense of democratization of power itself… I encourage and support and see the ease of doing business and the ‘by default’ setting of transparency which comes with this whole mechanism..”  

she said.

The minister also claimed that other countries have had to adopt Bitcoin (BTC) and other cryptocurrencies because it helps provide financial inclusion. However, according to Sitharaman, India has already achieved this through the Pradhan Mantri Jan Dhan Yojana. The initiative is a financial inclusion program of the Government of India which aims to expand affordable access to financial services such as bank accounts, remittances, credit, insurance, and pensions to citizens. 

While Nirmala Sitharaman remains one of the biggest opponents of cryptocurrencies and blockchain technologies, the Indian crypto community hopes this will change. The finance minister should be more open-minded to allow the technology to thrive. Her ministry’s stance has so far hampered India’s prospects of having a leadership role in the field.