A new report in the ET suggests that the Indian government has formed a inter-ministerial consultations to figure out how they can ban cryptocurrencies and regulate official digital cryptocurrencies.
The “Banning of Cryptocurrencies and Regulation of Official Digital Currencies Bill 2019" draft has been circulated to relevant government departments, a government officials aware of details told ET.
The ET report further states that a number of government departments including the Department of Economic Affairs (DEA), Central Board of Direct Taxes (CBDT), Central Board of Indirect Taxes and Customs (CBIC) and the Investor Education and Protection Fund Authority (IEPFA) have endorsed the idea of a complete ban on cryptocurrencies; sale, purchase, and issuance.
These agencies are of the view that there's already been a lot of delay and inaction towards banning Bitcoin and cryptos.
While we've heard this before this report seems a little different from the older ones as ET claims to have reviewed the minutes of the meeting.
There is an urgent need to ban sale purchase and issuance of cryptocurrency” according to minutes of the meeting reviewed by ET.
While implementation of such a ban won't be easy in India, the government can do this only after the new government is formed after the elections.
It's unlikely the last government will do anything positive around cryptocurrencies if they come back into power again. This sector is the least of their priorities.
The committee also observed that since cryptocurrency could be used for money laundering, a ban could also be achieved under the Prevention of Money Laundering Act (PMLA).
The ministry of corporate affairs has in its feedback to the department of economic affairs pointed out the sale purchase and issuance of cryptocurrencies such as Bitcoin, Etherium & Cashcoin etc. are being done by individuals and companies on false inducements of massive returns.
While Cashcoin was an outright scam, what this tells me is that the government is clueless about the differences between Bitcoin, Ethereum and Cashcoin scam. It's so sad that such senseless statements are made by the government without due consideration for new developments in the world of FinTech globally.
The ministry also recommended that as the bill may take time to be implemented, therefore, individuals using cryptocurrencies to defraud investors and launder money be prosecuted under the Prevention of Money laundering Act till a detailed bill is brought.
This sets a dangerous precedent and as we've seen in recent times, taking the government to the court is largely a waste of time as almost 1 year is up since the case RBI vs Crypto exchanges has begun and nothing concrete has been accomplished out of it so far.
Let's stay tuned to what happens next in this space. I'll be back with more updates.
As usual, we are fine in the short term. These policies will take time to get passed and implemented. I don't see any major problems coming our way atleast in the next quarter.
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