In a written response to a question in the Rajya Sabha on Tuesday, MoS Finance Anurag Singh Thakur had stated that the government would take a decision on the recommendations of the Inter-Ministerial Committee (IMC) on cryptocurrencies in India.

The likely government ban on Bitcoin and other cryptocurrencies could cause crypto startups from India to migrate to cheap ecosystems around the world, along with numerous Indian investors who may do business on international exchanges, according to Ajeet Khurana, a well-known Cryptocurrency expert. Khurana was previously the head of the Blockchain and Cryptocurrency Committee of the Internet and Mobile Association of India (IAMAI) and the former CEO of the cryptocurrency exchange ZebPay. “The foreign exchange doesn’t care about the ban. After all, many Indian crypto companies could move overseas due to the ban. In addition, investors who live in small towns and have invested, for example, 5,000 or 10,000 rupees will all transact on international exchanges, even if the government cannot reach them individually. The move will effectively cost millions of dollars in crypto transaction volume and give it away to international exchanges, ”said Khurana, currently Venture Partner and Global Expert at the Blockchain Founders Fund, in an interaction with Financial Express Online. The Singapore-based fund invests in companies involved in blockchain technology.

According to a Lok Sabha bulletin in January for the budget meeting, the government is expected to launch a cryptocurrency soon and an ordinance on the Official Digital Currency Act of 2021 to ban all “private cryptocurrencies” in the country such as Bitcoin except for “certain” ones Exceptions to promote the underlying technology of the cryptocurrency and its use, ”the legislation had read. However, the bill was intended to “provide a framework for the creation of the official digital currency to be issued by the Reserve Bank of India”. However, Finance Minister Nirmala Sitharaman, speaking to CNBC TV18 earlier this month, stated that the government wants to ensure that a window is available for all kinds of experiments that need to take place in the crypto world.

However, the Reserve Bank of India had continued to have a strict stance on the use and introduction of cryptocurrencies in the country. As early as 2013 and 2017, Apex Bank had warned users of possible financial, operational, legal, customer protection and security risks in virtual currencies. In April 2018, it practically banned cryptos. The RBI had asked all regulated companies to stop trading virtual currencies or providing services such as registration, trading, settlement, clearing, granting credit against virtual tokens, acceptance as collateral, opening accounts for exchanges that deal with them, etc. to offer. Still, the ban was lifted by the Supreme Court last March, despite the fact that the RBI argued that the use of cryptos would fundamentally undermine India’s credit system and currency stability. In an interview with CNBC TV18 in February 2021, RBI Governor Shaktikanta Das had said the central bank had “major concerns” about crypto-related risks to financial stability.

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“The opinion of the RBI must be taken seriously. Given this, the government may be forced to take prohibitive measures. What can the government do because this is a problem for them? I hope the government understood that there is a difference between cryptos and crypto investors and service providers. It can’t ban cryptos, it’s impossible. You can still ban the internet, but not crypto. At best, you can ban crypto deals like exchanges, ”said Khurana.

In a written answer to a question in the Rajya Sabha on Tuesday, the Minister of State for the Treasury, Anurag Singh Thakur, said that the government would take a decision on the recommendations of the Inter-Ministerial Committee (IMC) on cryptocurrencies in India. Accordingly, a legislative proposal would be submitted to Parliament if necessary. It is important that the IMC, which was headed by the former Secretary of the Ministry of Economic Affairs, had already proposed measures for cryptocurrencies in February 2019. “However, Garg had said last year that cryptos should be regulated as an asset class. It is interesting that the architect of the report is asking for regulation himself, ”said Khurana.

The suggestions / recommendations on cryptocurrencies in this story come from the respective commentator. Financial Express Online assumes no responsibility for their advice. Please consult your financial advisor before investing in cryptocurrencies.

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