India’s Crypto Panel Proposes a Sovereign Cryptocurrency Amidst a Controversial 10 Year Jail Term for Private Dealing
Governments across the world are slowly moving towards regulating the cryptocurrency field, looking at ways to protect investors while promoting growth in the industry. However, there remains a small fraction of jurisdictions where crypto remains a taboo subject and strict regulations are passed hindering the growth. India may yet join the latter group of countries if the cryptocurrencies recommendations committee set by the Ministry of Electronics and Information Technology, the Securities and Exchange Board of India, and the Reserve Bank of India is passed into law.
India Panel Proposes 10 Year Jail Term for Dealing In Crypto
In a statement released earlier in the week, the committee proposed the ban of all private cryptocurrencies and a 10 year jail term and a fine if caught dealing with such currencies. Consequently, the panel, headed by economic affairs secretary Subhash Chandra Garg, proposed that the government should launch its own sovereign digital currency, a Digital Rupee.
The Banning of Cryptocurrency & Regulation of Official Digital Currency Bill, 2019 calls for the ban of private cryptocurrencies such as Bitcoin. The committee says that the cryptocurrencies are inconsistent with the functions of actual money and are offered by non-sovereigns which beats its use as a replacement for fiat. The report further reads,
“The Committee recommends that all private cryptocurrencies, except any cryptocurrency issued by the state, be banned in India. The Committee endorses the stand taken by the RBI to eliminate the interface of institutions regulated by the RBI from cryptocurrencies.”
Dealing in mining, trading, buying, selling and exchange of cryptocurrencies is set to attract a fine ranging between Rs1 lakh ($1,500), for non-commercial dealings in virtual currencies, and Rs25 crore ($3.7 million) for commercial dealings. Dealing in crypto also carries an imprisonment term not less than 1 year and not more than 10 years.
“Government’s Crypto Is Good Crypto”
While private cryptocurrencies are set to be banned on the committee’s recommendation, a proposal to launch a sovereign cryptocurrency shows a bullish side to the industry. The committee proposed the launch of a Digital Rupee by the Reserve Bank of India (RBI) to promote the technological benefits brought about by the fourth revolution.
The panel believes that decentralized ledger technologies
“will play a major role ushering in the digital age.”
“The DLT-based systems can be used by banks and other financial firms for processes such as loan-issuance tracking, collateral management, fraud detection and claims management in insurance, and reconciliation systems in the securities market.”
– the panel on digital currency regulation in India.
The news on banning cryptocurrencies in India was received harshly across cryptocurrency communities who see the move as
“a hindrance to innovation in the country.”
Ajeet Khurana, the CEO of ZebPay, which was forced out of the country last year, called out the move to ban cryptocurrencies saying,
“There’s negative news coming out of India about cryptocurrency. This saddens me as I fear that we are closing the door to innovation.”