The fight by the Indian government against cryptocurrencies in the country continues with the latest recommendation by a government panel to the finance ministry to effect a blanket ban against all cryptocurrencies not created by the government and ‘purporting’ to act as currencies.
The recommendation was made on Monday, July 22nd in a report that states,
“The Committee notes with serious concern mushrooming of cryptocurrencies almost invariably issued abroad and numerous people in India investing in these cryptocurrencies.”
The panel continues that “All these cryptocurrencies have been created by non-sovereigns and are in this sense entirely private enterprises.”
In addition, the panel asked the Indian government to consider launching a digital currency run by the Reserve Bank of India to complement the Fiat currency.
The government panel, which is led by the country’s finance secretary Subhash Chandra Garg recommends that any person found dealing in non-government-issued cryptocurrencies either through mining, buying, selling, holding, generating, transferring or issuing these currencies should be liable to paying a fine not less than 250 million rupees ($3.63 million) and possibly speeding up to 10 years in jail. “There is no underlying intrinsic value of these private cryptocurrencies,” the panel iterated in the report. “These private cryptocurrencies lack all the attributes of a currency. There is no fixed nominal value of these private cryptocurrencies i.e. neither act as any store of value nor are they a medium of exchange.”
The bill is now awaiting ratification by the government legislators and regulators before it goes into effect and possibly spelling the end of cryptocurrency use in the major Asian economic market. Speaking to another media, Sathvik Vishwanath, a co-founder of Unocoin cryptocurrency said that “If the government decides to take such a drastic step then India will stand to lose out significantly on the technology front.” Expressing similar sentiments, Nischal Shetty, the CEO of Indian-based cryptocurrency exchange WazirX told that “Banning cryptocurrencies is a regressive step and no country or government should ban a new technology such as this.”
It is worth noting that the panel expressed positive sentiments about the underlying blockchain technology saying that it was good as opposed to cryptocurrencies. This seems like a contradiction but points to the fact that the panel appreciates the innovation but eschews the use of cryptocurrencies to try and replace the official Indian Rupee.