India is usually recognized as a country where cryptocurrency is banned. The recent reports on the draft bill and its’ leaders stance have often been against it. However, no official statement or law is yet passed by the Government. Moreover, the Indian Central bank, which is actively involved in the decision, has formally denied any knowledge of a ‘draft bill.’
Hence, in such an uncertain environment, it is necessary for the Government to step up and clarify the doubts.
The members of the Upper House of the Indian Parliament, Mr. Dharmapuri Srinivas and S. Gnanathiraviam raised the questions on it in the Parliament. Mr. Anurag Singh Thakur, the Minister of State for Finance and Corporate Affairs, addressed their queries.
BAN or NOT?
Mr. Srinivas and Mr. Gnanathiraviam first question were to clear the Government’s stand on cryptocurrency.
a) whether the Government has prohibited cryptocurrency in the country;
b) if so, the details thereof;
Mr. Thakur confirmed that cryptocurrency hadn’t been banned in the country yet. He said,
The issue of permitting trading in crypto currencies is currently under examination by an Inter-Ministerial Committee (IMC).
Banking services have been prohibited for ‘Virtual Asset Service Providers’ in the country since July 6th, 2018. Moreover, licenses to firms operating with Cryptocurrencies haven’t been provided as well; a small number of firms which operate in India have been registered outside the country. Mr. Thakur noted,
Presently, there is no separate law for dealing with issues relating to cryptocurrencies.
Progress Made by the Government on the Issue
The Government of any country cannot outright impose a ban on an ambiguous thing without proper consultation and weighing the ramifications. Moreover, the global presence of cryptocurrencies makes it nearly impossible to kill. Hence, the Governments must survey the prevalence and undergo a decision-making process. Mr. Sinivas also enquired about the progress made there. He asked,
c) whether the Government has taken note about the prevalence of cryptocurrency in the country;
d) if so, the details thereof; and
Mr. Thakur reiterated in reply that the IMC had been set up under the purview of the Finance Secretary of India. Mr. Takur noted that the,
The IMC has submitted the Report to the Government.
No further details were provided on the issue. He cited the absence of a global regulatory framework and the risk associated with virtual currencies. This is the primary reason for the delay – caution, and delay from Governments all over the world. He also said,
No decision on licensing and authorizing any entity or company to operate such schemes or deal with Bitcoins or any virtual currency has been made as yet.
On Legal Matters On Cryptocurrency at the Moment
The recent media reports and a draft bill of the ‘Crypto Ban’ in India suggested that even investors, miners, and other Service providers stand to face ten years of imprisonment. Hence, the questions around the existing laws which govern the cryptocurrencies, the following question was raised,
e) the action was taken against the persons who are responsible for running the cryptocurrency in the market?
Mr. Thakur replied that due to the absence of any rules pertaining to crypto, the general penal codes are applied to cryptocurrencies also at the moment. Moreover, the Central Bank and IRS equivalent in the country also relies on existing laws to address cases on cryptocurrencies.
The discussions in the parliament come as temporary relief for the investors and even service providers in the game. However, the matter is still unclear about how the report submitted to the Government by the IMC has viewed crypto laws in the country.
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