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Tuesday, December 07, 2021

House panel meets crypto industry: Balancing ‘regulation, innovation’ in focus

“There were lot of issues discussed around cryptocurrencies. Everyone (from industry) gave their views. Now we have to wait for the government,” a member of the parliamentary committee told The Indian Express.

By: ENS Economic Bureau | New Delhi |
November 16, 2021 4:00:17 am
Jayant Sinha, BJP MP and Chairperson of the Standing Committee on Finance. (File)

Amid indications of the government planning to introduce a legislation on cryptocurrencies in the Winter Session, the Parliamentary Standing Committee on Finance on Monday called a meeting of key stakeholders to understand their views and examine how to balance “regulation and innovation”. The Winter session will be from November 29 to December 23.

“There were lot of issues discussed around cryptocurrencies. Everyone (from industry) gave their views. Now we have to wait for the government. The government is going to bring the Bill to Parliament in this Winter session. Once that Bill is referred to the Standing Committee, then we get an idea what it states, and how the Bill will take care of it,” a member of the parliamentary committee told The Indian Express.

Industry executives told the panel that there are a total of around 15 million active subscribers on their exchanges in India, with the outstanding value across the exchanges pegged around $6 billion, sources said.

The cryptocurrency associations and industry experts were called by the Committee to hear them on the subject ‘CryptoFinance: Opportunities and Challenges’. Sources said the Committee hasn’t formed any views on the subject yet and expects that the government would refer to it the proposed legislation in this regard.

“It’s not clear at the moment (on how to regulate it)…it’s just some first kind of baby steps of how to come to grips with it, although a little too late because according to the industry they have 15 million subscribers already, which is a very large number. This indicates that the transaction may be running into $2-3 billion and the government is totally unaware of it,” the member said.

“Endeavouring to regulate cryptocurrency is equivalent to trying to regulate trolls on social media,” said Congress Lok Sabha MP Manish Tewari, a member of the panel. The committee, it is learnt, may hold more meetings.

The Committee heard various views from industry to understand developments around cryptocurrencies, but it “did not come to any view on the matter,” Jayant Sinha, BJP MP and Chairperson of the Standing Committee on Finance told CNBC-TV18.

This is the first such meet called by the Standing Committee, where representatives of crypto exchanges, Blockchain and Crypto Assets Council (BACC), among others, participated. WazirX, CoinDCX, PocketBits and Laxmicoin were among participants. India has been a leader in fintech regulation, and in the cryptocurrency segment there is a need to balance “innovation and regulation”, he said, adding it’s his personal view.

Many of the committee members, it is learnt, also felt that cryptocurrency cannot be banned. They, too, favoured regulating cryptocurrency exchanges. Some however, felt regulating the cryptocurrency industry is easier said than done. Sources said the Committee members were particularly concerned about ensuring security of people’s money, and one member also expressed concern over the publication of full-page ads on cryptocurrencies appearing to lure speculation in this segment.

The Parliamentary panel’s meeting came two days after Prime Minister Narendra Modi on Saturday chaired a meeting on the way forward for managing the cryptocurrency sector where a consensus emerged on the government needing to take “progressive and forward-looking” steps while ensuring that an unregulated crypto market does not lead to “money laundering and terror financing”, sources said. Some panel members are learnt to have cautioned stakeholders that cryptocurrencies should not go the way of ponzi schemes.

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