India’s Ministry of Finance has clarified some questions concerning the status of cryptocurrency, crypto regulation, and crypto investor protection in the country. The minister also indicated that the recommendations in the draft bill proposed by the interministerial committee are still being considered.
The Indian minister of finance, Shri Pankaj Chaudhary, answered Monday some questions about cryptocurrency trading on the hearings in Lok Sabha, the lower house of India’s parliament.
Regarding the status of cryptocurrency trading in India, the Minister of State for the Ministry of Finance replied: “This information is not collected by the government.”
This answer confirms his recent words that the government does not collect information on the number of cryptocurrency exchanges or traders in India and has not been informed of any fraud conducted by any exchanges.
On the second question about the current regulatory regime surrounding cryptocurrency and its trading, the minister explained that all entities regulated by the central bank, the Reserve Bank of India (RBI), have been advised to carry out customer due to diligence processes in line with a number of regulations, including know your customer (KYC) standards, anti-money laundering (AML) law, Prevention of Money Laundering Act (PMLA), and Foreign Exchange Management Act (FEMA) for overseas remittances.
Next, the minister was asked about the laws to protect crypto traders and investors from fraud and other misdemeanors in its trading.
“Depending upon the nature of the fraud, various laws, including the Indian Penal Code 1860, are in place for protection against fraud,” he replied.
The last three questions were concerning whether the government intends to introduce regulations specific to cryptocurrency trading in India.
The minister of finance confirmed the several earlier answers in parliament, starting with the announcement in the Budget Speech for 2018-19 stating:
“The government does not consider cryptocurrencies legal tender or coin and will take all measures to eliminate the use of these crypto-assets in financing illegitimate activities or as part of the payment system.”
Next, the minister mentioned the interministerial committee (IMC) constituted under Former Finance Secretary Subhash Chandra Garg, who no longer holds a position in government. The minister claimed that the IMC “recommended in its report that all private cryptocurrencies, except any cryptocurrency issued by the state, be prohibited in India,” adding:
“The government would take a decision on the recommendations of the IMC and the legislative proposal if any would be introduced in the parliament, following the due process.”
As reported, the finance minister announced before that the crypto cabinet note is ready for consideration; however, the crypto bill still is not listed among the items to be considered in this parliament session.
Last month Bloomberg reported, the deputy governor of the Reserve Bank of India (RBI) T Rabi Sankar said that the RBI will introduce its own version of central bank digital currency (CBDC) in a phased manner and after carefully weighing its impact on various issues, including how it could hamper the deposit mobilization abilities of banks, and its potential effect on the conduct of the monetary policy.