Download Free eBook!

Know about the top 43 angel investors of India to take your startup from zero to hundred.
Get it now!

It’s Official: India Govt Committee Recommends Ban On Cryptocurrency

As many cryptocurrency startups and enthusiasts feared, the Indian government’s inter-ministerial committee (IMC) has submitted its report on the use of virtual currencies in India, which recommends a ban on cryptocurrencies.

The report was submitted along with a draft bill and has been received by the government. The IMC comprised of  the Secretary (Economic Affairs) as the chairman, along with the Secretary, ministry of electronics and information technology, SEBI chairman and the deputy governor of the Reserve Bank of India. The report and the draft bill will be reviewed and examined in consultation with concerned departments and regulatory authorities before a final decision is taken on the fate of cryptocurrency in India. A copy of the report and the draft bill for ‘Banning of Cryptocurrency & Regulation of Official Digital Currency Bill, 2019’ has been listed on the official Department of Economic Affairs website.

India Looks To Ban Cryptocurrency

As expected, the report highlighted the positive aspect of distributed-ledger technology (DLT) commonly known as blockchain and the various potential applications, especially in financial services, for example, in processes such as loan-issuance tracking, collateral management, fraud detection and claims management in insurance, and reconciliation systems in the securities market.

At the same time, the IMC report proposes that the government look at an official digital currency in lieu of private virtual currencies or crypto coins and tokens. But for private cryptocurrencies, the committee noted the risks involved and volatility in their prices, which led to it recommending a ban on cryptocurrencies in India and imposing fines and penalties for carrying on of any activities connected with cryptocurrencies.

The IMC has also proposed setting up a Standing Committee to revisit the cryptocurrency-related issues.

“It is essential to note that as of date no country across the world however treats virtual currencies as legal tender.” – IMC Report

India’s Definition Of Cryptocurrency

Strangely, the word ‘cryptocurrency’ in the 18-page Draft Bill has been defined as any information or code or number or token not being part of any official digital currency, generated through cryptographic means or otherwise, providing a digital representation of value which is exchange with or without consideration, with the promise or representation of having inherent value in any business activity which may involve risk of loss or an expectation of profits or income, or functions as a store of value or a unit of account and includes its use in any financial transaction or investment, but not limited to, investment schemes.

This clearly separates cryptocurrency from digital rupee and digital foreign currencies. The definition seems to be targeting digital currencies not backed by any central banks. However, in contrast, according to the Australian Anti-Money Laundering and Counter-Terrorism Financing Act, cryptocurrency is defined as a type of currency that only exists in digital rather than physical form (not coins or notes, for example) and can be exchanged for goods, services or physical currency and is not issued by or under the authority of a government.

The full document of the draft bill and the report from the IMC is available below:

Share

Recent Posts

Traders Body CAIT Calls For Boycott Of Chinese Products, 500% Duty Hike

Calling China a probable enemy, the Confederation Of All India Traders has given a call to boycott Chinese products and…

August 18, 2019 8:46 pm

AI-Driven Or Sham? App Development Startup Engineer.ai Accused Of Exaggerating Its AI Tech

A mobile-app building startup Engineer.ai has been accused of exaggerating its AI capabilities to court more customers and investors. A…

August 18, 2019 6:49 pm

Karnataka In Talks With Stakeholders To Develop EV Biz Cluster

The Karnataka government is looking to extend its lead in the promotion of electric vehicles with the plans to build…

August 18, 2019 3:13 pm

The Most Important Concept For Sales Success In 2019

Too many people are in the business of convincing others they’re wrong and criticizing their opinion. It doesn’t work, and…

August 18, 2019 2:15 pm

Airtel Ties Up With UP Govt For Egovernance Initiative

Telecom operator Airtel has announced that will implemented a future-ready state wide area network (SWAN) for the Uttar Pradesh government…

August 18, 2019 1:37 pm

Health ATMs: The Next Frontier In Healthcare Delivery And Preventive Care

In December 2016, Essar Foundation established the first Health ATM at the Primary Health Centre in Palnar to provide quality…

August 18, 2019 10:30 am