Indian regulators are currently standing at the periphery of the Cryptocurrency ecosystem, trying to decide whether and how to enter the market, so that no negative effects are befallen on the economy and citizens. The committee led by Subhash Chandra Garg, secretary, department of economic affairs, is looking into the regulatory framework that is required for crypto assets and virtual currencies. In most likeliness a report of the same will submitted by December, it is asserted that the report will amend existing laws and holding cryptocurrencies, that is not approved by the government will be a punishable offence.
Last, year in December the aforementioned committee was set up to examine issues related to crypto assets and their subsequent regulations. Led by Garg, other members of the panel include Securities and Exchange Board of India chairman Ajay Tyagi and Reserve Bank of India (RBI) deputy governor BP Kanungo. In its last stages of deliberation the panel will soon disclose the government’s approach pertaining to virtual currency.
The finance minister of India, Arun Jaitley, pronounced cryptocurrency as an illegal tender in India in his budget speech for 2018-19. Though, he disclosed government’s incline towards the underlying technology, Blockchain. The technology could be employed to introduce Distributed ledger system that can bring transparency and efficiency to India’s digital payment systems, while keeping a record of a chain of transactions, eliminating the need of intermediaries.
The key fear that the government and the central bank of India pose is that the unregulated assets could be used as to evade taxes or to strike deals outside the regulatory boundaries, including multi-level marketing (MLM) and Ponzi schemes. The government also awaits the special report on the subject by RBI, who formed a inter-departmental group in April to “provide guidance on the desirability and feasibility to introduce a central bank digital currency”.
More: India May Launch It’s Own Government Backed Cryptocurrency
RBI has barred banks and financial companies from dealing cryptocurrency, and any such services offered by them was forced to shutdown. The Ban also asked banks and financial institutions to not to entertain any transactions or relationship with crypto-related traders or businesses. However, they have also mentioned that the rapidly changing landscape of the payments industry has been pushing central banks around the world to look into the option of introducing fiat digital currencies.’
In their annual report for 2017-18, the Securities Exchange Board of India (SEBI) have reported sent officials to Japan’s Financial Services Agency; the UK’s Financial Conduct Authority, and Swiss Financial Market Supervisory Authority, to study the “international regulators and gain deeper understanding of the systems and mechanisms.”
Read more: India’s Prime Minister Narendra Modi Appraises Blockchain Technology, AI & ML
Source: MoneyControl.com
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