(BlockBar) On Monday, India’s Ministry of Finance announced that the Indian Virtual Money Expert Group has submitted a report and draft bill to the government, recommending a ban on encrypted currencies in India, but maintaining an open attitude towards official digital currencies.
The announcement mentioned that the expert group was established on November 2, 2017, specializing in issues related to virtual currencies, and responsible for putting forward specific proposals. At present, the government has received its report and draft bill. Prior to the final decision of the Government, all relevant departments and regulatory bodies will be consulted to verify the report and the proposed draft bill.
In the report, they highlighted the positive aspects of DLT technology, and proposed various scenarios for the use of DLT in India, especially in financial services. DLT-based systems can be used by banks and other financial companies for processes such as loan issuance tracking, collateral management, fraud detection, insurance claims management, and reconciliation systems in securities markets.
For encrypted currencies, in view of their risks and price volatility, the panel recommended banning the use of encrypted currencies in India and imposing fines for any activities related to encrypted currencies in India. As virtual money and its basic technology are still developing, the Group recommends that the Government establish a standing committee to reconsider the issues mentioned in the report when needed.
According to the draft bill, anyone who participates in a Bitcoin or encrypted ecosystem will face criminal penalties. The bill recommends a 10-year prison sentence for those who “directly or indirectly” exploit, hold, sell, transfer, issue or trade encrypted currency. Last week, local block chain law experts in India shared a draft legislation on social networks. The draft states that India intends to approve the “digital rupee” issued by the National Reserve Bank as legal tender, while all other encrypted currencies will be banned.
However, it is reported that Indian Finance Minister Anurag Thakur gave a negative answer last week when asked if the encrypted currency was really illegal. Thakur said there was no specific laws for encrypting currencies.
Key words: Cryptocurrencies; India; Regulation;
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