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Thursday, August 13, 2020

Government panel recommends ban on private cryptocurrencies

The Reserve Bank of India had earlier prohibited banks and financial institutions from providing services in relation to cryptocurrencies.

By: Express Web Desk | New Delhi | Updated: July 22, 2019 7:28:47 pm
cryptocurrencies, cryptocurrencies ban, india cryptocurrency ban, india cryptocurrencies, cryptocurreny rbi circular (Representational Image)

An inter-ministerial government committee has recommended a ban on cryptocurrencies and imposing fines and penalties for carrying out any activities related to digital currencies in the country.

The government had constituted an inter-ministerial committee (IMC) on November 2, 2017, under the chairmanship of the economic affairs secretary, with the secretary of the Ministry of Electronics and Information Technology, Sebi chairman and an RBI deputy governor as members to study the issues related to virtual currencies, and propose specific action.

“As for private cryptocurrencies, given the risks associated with them and volatility in their prices, the 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 release said.

The recommendation comes a day after Minister of State for Finance Anurag Thakur denied that the government was considering a blanket ban on trading in cryptocurrencies.

“Presently, there is no separate law for dealing with issues relating to cryptocurrencies. Hence, all concerned departments and law enforcement agencies, such as RBI, Enforcement Directorate and Income Tax authorities, etc. take action as per the relevant existing laws,” Thakur said while responding to questions in the Rajya Sabha.

The report said that other than Bitcoin, several other cryptocurrencies have emerged including Ethereum, Ripple and Cardano.
As of now, there are around 2,116 cryptocurrencies, with a market capitalisation of USD 119.46 billion, the report said. The committee has also suggested a draft legislation — the Banning of Cryptocurrency & Regulation of Official Digital Currency Bill, 2019.

This report and the draft bill will now be examined in consultation with all the departments concerned and regulatory authorities, before a final decision is taken by the government, the release said.

The Reserve Bank of India had earlier prohibited banks and financial institutions from providing services in relation to cryptocurrencies.

Cryptocurrencies are digital currencies in which encryption techniques are used to regulate the generation of the currency units and verify the transfer of funds operating independently of a central bank.

(Inputs from PTI)

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