The Department of Economic Affairs in India has published a detailed report along with the draft bill on their website. The IMC or Inter-Ministerial Committee formed on November 2nd, 2017 after deliberation over a year submitted that report before the Government on February 28, 2019.
Recently, the Finance Minister of State and Minister of Corporate Affairs, Anurag Singh Thakur, confirmed that while cryptocurrency is not banned yet, the report is still pending with the Government.
The IMC members included Chairmanship of Secy (EA), with Secy (MeiTY), Chairman (SEBI), and Dy. Governor, RBI as Members, to study the issues related to virtual currencies and propose specific action to be taken in this matter.
The reports suggest that cryptocurrencies are a tremendous financial and security threat to the country; hence, they must be banned. Nevertheless, to include the DLT or blockchain technology, the report has also proposed an ‘Official Digital Currency’ in place for all cryptocurrencies. They also emphasized the importance and prevalence of Central bank digital currency (CBDC), the digital form of fiat money.
The reports suggested that the crypto-fever has caught on pretty fast in India. According to the report,
In February 2018, there were around 50 lakh traders in India in 24 exchanges and cryptocurrency trading volumes are in the range of 1500 bitcoins a day, or around Rs. 1 billion, whereas the global 24-hour trading volume is in excess of 21 billion USD.
The report has planned to cease all cryptocurrencies, or the Central Government will direct how to dispose of them.
According to the press release,
Group has recommended banning of the cryptocurrencies in India and imposing fines and penalties for carrying on of any activities connected with cryptocurrencies in India.
The Committee held three meetings from November 2017 to January 2019 and finalized the report. It held its final meeting on 9-11th January 2019. After much consideration and deliberation among the leading member of the Indian Central Bank, SEBI Chairman, Finance Ministry, DEA and so on, the draft bill was approved.
Despite recognizing the regulatory state of cryptocurrencies in Countries all around the world like Japan, New York, Switzerland, Russia, China, and so on, the IMC considered that a ban was necessary.
Nevertheless, it has recognized the need for learnings from “global standard-setting bodies like the IOSCO and FATF.” Also, India seems to be imposing the ban from Chinese influence and development of CBDC through payment apps. However, recently, even China recognized Bitcoin as a legal ‘virtual property.’
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