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In the past, The Reserve Bank of India has warned the public and also private sector banks of the country against providing banking services to individuals and businesses associated with the settlement of virtual currencies, crypto exchanges and other crypto related businesses. Now, according to a recent report published by The Economics Times, the government of India has already started inter-ministerial discussions on circulating ‘draft bill to ban cryptocurrencies and regulate official digital currencies.’
It is not the first time that the Indian government has taken a stand against the crypto market. Previously, the Government of India has censured cryptocurrencies quite a few times; however, it is also keen about adopting blockchain technology.
Government officials aware of the matter told the ET that the draft bill, dubbed “Banning of Cryptocurrencies and Regulation of Official Digital Currencies Bill 2019,” has been circulated to relevant government departments. However, they haven’t made any remark regarding ‘official digital currency,’ which might be referring to the ‘digital Rupee.’
As per the details revealed by anonymous government official, the Department of Economic Affairs (DEA) in agreement with the Central Board of Direct Taxes (CBDT), the Central Board of Indirect Taxes and Customs (CBIC) and the Investor Education and Protection Fund Authority (IEPFA) are all in favor of idea of ban on the “sale, purchase and issuance of all types of cryptocurrency.”
The final decision will come out based on the feedback from consulting Government departments and is expected to be proposed to the next government that will come to power after the end of the upcoming elections in May.
A committee formed by the Indian government, which is being led by Finance Secretary Subhash Chandra Garg and representatives of the DEA, CBDT, CBIC and the IEPFA departments have suggested “an urgent need of a ban” on digital currencies as it has already been ‘a lot of delay in taking action against cryptocurrency.’ According to the ET report, the Government could ban cryptocurrencies under the Prevention of Money Laundering Act (PMLA) as it could be used for money laundering and other such illicit activities.
The country’s Ministry of Corporate Affairs has reportedly notified the department of economic affair that cryptocurrencies such as Bitcoin, Ripple, Ethereum, etc. are being offered to individuals by fraudsters and companies promising them greater returns than actually possiblel such schemes can be Ponzi schemes and used to “defraud gullible investors.” In addition to that, these schemes do not ‘fall within any regulated legal framework.’
Lastly, the ministry also said that it may take time for approval of the bill with all the major government departments. Until then, all criminal activities associated with crypto will be charged under the Prevention of Money laundering Act (PMLA).