Governmental Inter-Ministerial Committee Proposes Law To Ban, Penalize Holders Of Private Cryptocurrencies In India

A law could be enacted to ban as well as penalize holders of private cryptocurrencies in India, according to a recent recommendation by an inter-ministerial committee set up by the government.

Accordingly, the committee headed by Finance Secretary Subhash Chandra Garg has proposed a draft bill called ‘Banning of Cryptocurrency & Regulation of Official Digital Currency Bill, 2019’ which has been placed in public domain.

However, the committee has also taken a lenient view on the government launching its own official digital currency, and asked it to keep an open mind on the matter.

The committee comprising Ministry of Electronics and Information Technology (MEITY) Secretary Ajay Prakash Sawhney, Securities and Exchange Board of India (SEBI) Chairman Ajay Tyagi and Reserve Bank of India (RBI) Deputy Governor B P Kanungo as its members, has suggested the use of distributed ledger technology (DLT) or block chain in India, especially in the field of financial services.

The committee has identified potential uses for block chain technology in areas such as payments systems including cross-border and small value payments; data identity management or know-your-customer requirements by various financial entities; insurance; collateral and ownership (including land) registries; loan issuance and tracking; e-stamping; trade financing; post-trade reporting; securities and commodities and internal systems of financial service providers.

However, the committee has cautioned that implementing a ban on private cryptocurrencies may not be easy.

It has quoted US anti-virus software guru and crypto currency bull John McAfee’s tweet which said that India’s plan to ban all crypto would be like banning mosquitoes after a rain.