This screenshot has been widely circulated over the past couple of days and some of you have reached out to me regarding the same. I'm going to clarify this as per my understanding of the information that is available today. Please feel free to do your own due diligence on this matter.
The committee that was built to form a legal framework around cryptocurrencies in India and legalise it might be actually working to ban it. This post is not to create FUD but to provide some insight into the matter.
- Use of private cryptocurrencies refer to cryptocurrencies that are not backed by the government. This doesn't specifically refer to privacy tokens but all kinds of cryptos such as BTC or even STEEM.
- "Use" here can refer to possession, trading as well as using cryptocurrencies as a mode of payment.
- Legal framework can be brought in to give power to the banks to give purpose to transactions which will allow them to track trades done via p2p channels. Currently this isn't possible as there is no law that allows banks to "decide themselves" why person A sent money to person B and what was bought or sold in exchange for transfer of these funds in question.
- Possibility that the RBI/government may launch their own cryptocurrency remains.
Other set of variables that I'm considering.
- Ban on use cases might be legally limited to cryptocurrencies being used as 'Legal tender.' As we know already, use of any currency (fiat or digital) other than INR is not legal in India.
- The legal framework might ban cryptos as legal tender and make it illegal enforceable by law.
- Trading and possession might be legalised or allowed. However, it's totally unclear at this point.
- Are we going to be forced to disclose our cryptocurrency holdings? IT-dept last year sent notices to 500 HNWI's demanding this information. However, if a legal framework might force our hand to disclose our cryptocurrency holdings.
- Blockchain technology is referred to as distributed ledger technology. However, it's one and the same. This is probably because they want to promote blockchain startups without tokenisation in India and somehow calling it differently people might think blockchain is different to distributed ledger tech. Some reporters in our esteemed media are stupid so they might take the bite!
- RBI is constantly at loggerheads with the government of India. So it's hard to say which way this is going to go.
This post is not to create FUD but to give some clarity on the press release from the government of India. There is no need to panic right now. Let's wait and watch. You can find the official press release by FSDC here!
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